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£12.00Written by: Jane Doe, Financial Analyst, Financial Times
The housing market is set to experience a drop in mortgage rates in the coming year, potentially opening up homeownership to a wider population. With various avenues available to save for a deposit and break into the property market, there are now more options than ever for aspiring homeowners.
Starting the savings process early is crucial, as the average deposit for first-time buyers stands at £34,500, according to UK Finance. Utilizing a Lifetime ISA can be beneficial, as it offers a 25% bonus for those saving towards their first home, with the government topping up savings by £1,000 for every £4,000 saved in a tax year. Digital mortgage broker Tembo has noted an increase in young savers taking advantage of this opportunity, with the potential to accumulate up to £22,000 in bonuses by age 30.
For individuals struggling to raise a deposit, there are now numerous low-deposit mortgage options available, including 95% loan-to-value deals. This represents the highest number of low-deposit mortgages on the market since the financial crisis of 2008, as reported by new figures. Among these options is Yorkshire Building Society’s £5,000 deposit mortgage, offering up to 99% of the purchase price in lending. Similarly, Skipton’s Track Record mortgage extends to 100% lending for those who can demonstrate a sound rent-payment history.
Shared ownership schemes have been accessible in England since the 1980s, allowing first-time buyers to purchase a share of their home between 25% and 75% of its value. Through a mortgage to acquire this share and rental payments to the landlord for the remainder, individuals can progressively increase ownership of the property. Shared ownership is not limited to younger buyers, with the average age of buyers now at 48. It is advisable to monitor eligibility criteria and express interest regularly, according to shared ownership specialists Snugg Homes
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