Since 2007 in Doncaster, the number of First-Time Buyers completing their Mortgage has been on the rise and in August 2019 it was at the highest level ever on record.
“There were 35,010 new first-time buyer mortgages completed in August, a 0.7% increase on July and the highest monthly total in 12 years.”
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Stephen Kerrigan, our mortgage expert from Scunthorpe, has provided tips for getting a mortgage to buy a home.
The Increase of First-Time Buyers
In another blog, we reported that house prices are showing more growth in Doncaster than any other place, which means that while house prices continue to rise, they are becoming more affordable for first-time buyers, especially as wages have risen to £10 per hour. This, coupled with a high level of competition within the mortgage market, has created an ideal environment for first-time buyers to get onto the housing ladder.
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Many competitions among the higher 95% loan-to-value mortgages tier has weakened over the last few months. Saying this, there are still some highly competitive rates currently available in the First-Time Buyer sector. Mortgages Remortgages – Doncaster Fee Free Mortgage Advisor is now offering a limited offer for Free Mortgage advice for anyone looking at getting a Mortgage. However, a number of first-time mortgage deals now do no product fees as well, such as HSBC’s rate of 2.69% (4.0% APRC) that is fixed until 31 January 2022, reverting to 4.19% thereafter. Not only does this deal not charge any product fees, it also still comes with the incentive of free valuation.
“The Lenders have become more accommodating to First-Time buyers based in the South Yorkshire region over the past months by expanding their range. This idea was fired up largely due to Government influences to help get customers onto the property ladder, such as with the Help to Buy Mortgage Guarantee Scheme from Halifax.”
As it stands then, First-Time Buyers in Doncaster have different variety of products to choose from, with over 300 fixed deals in fact, if they can afford a 5% deposit themselves or decide to turn to their family to get a Gifted Mortgage. First-Time Buyers may also be thinking about “Mortgage Advisors Near Me” to help them compare the overall package of any deal and in particularly for them to save on the upfront cost. Mortgages Remortgages is a Free Fee service offering free valuation and legal fee packages that is worth considering in this instance, or even a perk of cashback, which can be used on removal costs.
Did you know that even lower stamp duty or even a 0% stamp duty on a lower priced house has provided First-Time Buyers a huge boost to the Property Market? In October 2018, First-Time Buyers didn’t have to pay stamp duty on properties worth up to £300,000. On properties costing up to £500,000, they pay the tax only on £200,000.
Low interest rates and high loan-to-value mortgages which require smaller deposits offered by lenders may have also acted as an incentive to first-time buyers.
While the whole country was in chaos over the Brexit Uncertainty and Homeowners were paralysed over moving to a new property, First-Time Buyers have capitalised on being the favourable in the Property Market. This is because they take advantage of easy price growth, record low mortgage rates and new product innovations to make their first step on the ladder.
However, the number has dropped for Second-Steppers Mortgages have declined. Some 35,380 home-mover mortgages were given out in August – some 2,000, or 5.5 per cent less than in the same month in 2018. With that being said, these types of Mortgages are usually at the higher end of the pricing bracket, where people are more cautious about spending especially when we didn’t know about anything about Brexit.
The Doncaster Mortgage Advisor, Stephen Kerrigan also mentioned that we saw another drop-in buy-to-let Mortgages, which fell by 3.3% from 6,100 in August 2018. A drop-in buy-to-let mortgages has become the norm and is unlikely to change until the second home additional stamp duty charge is either removed or lowered. While the rise in first-time buyers is welcome, commentators have pointed out that the age at which people manage to get on the ladder continues to rise.
That means many still struggle to save for a deposit amid high prices, and also that they face paying mortgage until later in life. Meanwhile, first-time buyers continue to struggle to scrape together large deposits, as the average amount of finance being borrowed compared to the value of the property has increased by 0.4% to nearly 80%.
These continued efforts must change in need to be made to ensure that homeownership remains attainable early in adulthood, to avoid jeopardising this generation’s financial security later in life.
Okay, so year the housing market around Doncaster and South Yorkshire regions have has a slow and steady start of 2019, especially towards Brexit Uncertainty. However, now that a potential deal is in place thanks to current Prime Minister, Boris Johnson sales are looking to grow by an extra 2.2% every year. Yes it will be a slow start in growth for properties valued at £300,000 and below, but they will eventually be the best sellers.
It is also revealed that the North and South divide for average asking prices with 7% growth in Scotland, 5% in the North East, 4% in Doncaster and the Hull and 2% in the North West and Birmingham. Previous reports suggested that some growth gained on average the asking price for properties in the Yorkshire region and that they have stabilised since their earlier peak. But across the UK’s major cities average asking prices have been more resilient overall with more major cities reporting an increase for example, Leeds up 7% and Nottingham up 5%, while in Birmingham asking prices fell by 1%, while in London and Southampton they were down by 3%.
Across most major UK cities properties for sale continue to hold the majority share compared with housing stock available for rent in the third quarter of 2019. But rental housing stock volumes for this period are also substantial. The exception, where there are greater numbers of rental homes offered to the market than the number of properties that exist for sale, are in Doncaster, Hatfield and Bessacarr.
The report also reveals that there was a fall of 1.7% in new properties coming to the market as home owners have become more wary of listing their homes for sale while suggested Government proposals to make house sellers pay stamp duty instead of buyers in this quarter may have also contributed to this caution.
There were 1,715,395 new instructions in the third quarter of which 212,319 were fall throughs and 801,013 withdrawals in the market.
‘Consistent to our previous reports, this last quarter has again shown an overall slower moving market, reflecting the current unpredictable trading environment,’ said Stephen Kerrigan, Mortgage Advisor of Mortgages Remortgages Doncaster.
‘Consumers are showing caution when it comes to both buying and selling property. With the likely outcome of Brexit still unclear, the uncertainty over both the economy, consumer confidence and the housing market will persist at least in the short term,’ he added.