By Legal Futures’ Associates Thames Water Property Searches
In last month’s Budget, the Government announced a new 95% mortgage guarantee scheme that enables homebuyers to secure a mortgage with as little as a 5% deposit.
The new low deposit mortgages, which will see the Government underwrite the portion of the mortgage over 80% (so, with a 95 per cent loan, the remaining 15 per cent) have been heralded by many as a welcome boost for first time buyers struggling to get on the property ladder. However, some experts have pointed out they are likely to put further strain on already time pushed property professionals.
Managing Director of Barrows and Forrester Estate Agents, James Forrester, commented:
‘The recently announced ‘Boris Mortgage’ is on the face of it a welcome idea to bolster the property market. But with transactions at a near high again, there is a danger that this initiative will lead to overheating. Not just an issue for buyers in terms of ever climbing house prices but also in terms of more time added to the already sizable delays being seen at the back end of the transaction process.’
Thankfully Thames Water Property Searches are here to help, with our teams working around the clock to ensure the search element of each and every one of your property transactions proceeds as swiftly and smoothly as possible.
A plethora of high street lenders, including Barclays, HSBC, Lloyds Banks, NatWest and Santander have signed up for the mortgage scheme which can be used for purchases of property with a maximum value of £600,000 and is open to both first-time buyers and existing home owners.
Low deposit mortgages had virtually vanished from the lending landscape in the wake of the pandemic. The new scheme is designed to help those unable to come up with a hefty deposit, allowing them access to a much greater range of mortgages. It shares similarities with the old Help to Buy mortgage guarantee scheme which closed to new applicants back in 2017.
The new scheme opened for applications this month (April) and is set to run until the end of 2022. It will mean those on the ground, including conveyancers and estate agents, face yet more pressure whilst already dealing with a bottleneck of transactions hoping to be completed before the extended stamp duty holiday deadline of the end of June.
‘If you thought that the 2020 property market was hot, add in a further stamp duty extension, low interest rates and now, a Government backed, deposit subsidised mortgage scheme and you can expect the temperature to rise even further in 2021,’ says Ged McPartlin, Managing Director of Ascend Properties.
‘It’s great news for homeowners and those that believe that the economy, as it recovers from the pandemic, needs a strong housing market to help lift it out of purgatory.’
Meanwhile others struck a note of caution. Islay Robinson, CEO of mortgage brokers, Enness Global Mortgages, said: ‘Converting Generation Rent to Generation Buy is a noble initiative but not if it comes at the expense of wider market health.
‘95% mortgage products in any shape or form take the market into pretty overheated, dangerous territory and we’ve previously seen the results of this kind of precarious lending to those who aren’t really in the financial position to commit to it.’
Whatever challenges the months ahead pose in terms of the volume of property transactions you are juggling, rest assured that Thames Water Property Searches are here to provide a comprehensive, reliable and efficient service that will ensure all your property search needs are well taken care of.
https://www.thameswater-propertysearches.co.uk/LF
