Colin Bell, Chief Operating Officer of Purely Mortgages says:
“More could be done by lenders for first time buyers and our recent survey shows the difficulties young would-be borrowers are having at the moment. However, if you know where to look, there are some good options in the market for people trying to get on to the property ladder for the first time.”
Commentary:
Fixed Rates
The Chelsea Building Society has done it again and withdrawn its 4.69% two year fixed mortgage, with immediate effect on 11 February. This leaves the best two fixed rate product at 4.74% with Accord; this does not look competitive against two year trackers/discounts. If you need stability it may be time to look at three year fixed rates. If you still want a two year fixed rates, we know that they come and go and must be snapped up fast The Chelsea has replaced its market leader with 4.79% for 2 years, so those borrowers that did not take our advice last week are now in the cold, with no sign of better 2 year fixed rates about to be launched.
First Time Buyer Products
The first time buyer market is very much in the press at present. The government is still failing to kick start property chains by refusing to increase the minimum threshold for Stamp Duty. The average age of a first time buyer has moved to 33+ and 47% of 18-29 year olds want to buy – but many can’t.
What can lenders do? Well, providing low entry-cost, high loan to value competitive products is be a good start. There is a selection of first time buyer products listed below. They feature low fees, high loan to value, no higher lending charges and good rates. As difficult as it is to get on the property ladder, the longer you wait, the harder it gets as property price inflation continues to outstrip wage inflation.
Purely Customer Contact: 0800 4 22 00 33 or via its website at www.purely.co.uk
Current ‘Best Buys’
Fixed
Lender
Rate
Term
Initial Rate
APR
Reverts To
Incentives
Early Repayment Charges
Portman Building Society
2.35% Fixed
Until 28/02/07
2.35%
6.2%
6.74%
Beyond term
Accord
4.74%
Fixed
Until 31/03/07
4.74%
6.7%
6.74%
Within term
National Counties
4.79% Fixed
Until 01/04/08
4.79%
6.5%
6.74%
Within term
Portman Building Society
4.89% Fixed
Until 28/02/10
4.89%
6.3%
6.74%
Within term
Clydesdale
(Semi Exclusive)
4.90% Fixed
2 Years
4.90%
6.8%
6.84%
Free Valuation & Legal Fees
Within term
Discount/Tracker
Abbey
0.31% under Bank Base
2 Years
4.44%
6.7%
6.75%
Within term
Portman Building Society
2.26% discount from SVR
Until 31/03/07
4.48%
6.6%
6.74%
Within term
Intelligent Finance
Bank Base
Until 31/3/07
4.75%
6.0%
5.95%
Free legals and refund of valuation fee for remortgages
Within term
Alliance & Leicester
0.01% under Bank Base
5 Years
4.74%
6.6%
6.84%
Within term
First Time Buyer Friendly Products
Lender
Rate
Term
Initial Rate
APR
Reverts To
Incentives
Early Repayment Charges
Bristol & West
4.89% Fixed
Until 31/03/07
4.89%
6.8%
6.84%
95% LTV No HLC to pay, Free Val and legal costs cashback
Within term
Bank of Ireland
1start
5.35%
Fixed
Until 30/04/08
5.35%
6.7%
6.84%
95% LTV Guarantor Mortgage
Within term
Scottish Widows
5.49%
Fixed
Until
30/04/07
5.49%
6.2%
6.09%
100% LTV
Graduate mortgage
Within term
Coventry
MOREgage
Fixed
Until
31/03/08
5.99%
6.7%
6.79%
105% LTV – i.e. can borrow 5% over property value
Within term
Northern
Rock
Together
Fixed
Until
01/02/08
6.49%
7.1%
6.84%
125% LTV – i.e. can borrow 25% more than the purchase price.
£750 help with
costs
Within term
