95% Mortgages are back with a vengence! Good news for First Time Buyers

Date Published 20 June 2017

Thought to be a thing of the past by many, especially parents of grown up children still at home well into their twenties and often 30's, 95% Mortgages are not only well and truly back, but flourishing, with many Lenders out targeting first-time buyers with a flurry of new 95% mortgage deals.

The number of available 95% mortgage deals is up 14% since last year, to now 287.

To give you an idea, when we had the economic crisis of 2008, by June 2009 there were only six 95% deals available and I can only presume these were going direct, as I seem to remember the mortage advisor where i worked at the time saying there were none he could source.

The proportion of successful mortgage applications made by first-time buyers is also rising quickly, with 67% of applications made via Brokers going on to complete during the first three months of this year. This compares with 48% in the same period last year, with banks clearly being a little less stringent then they were back then.

We at Henton Kirkman in Billericay have certainly noticed a fast rise in first time buyers coming to the market, especially where there has been a marked fall in the number of Investors out looking, following the additional stamp duty hike for second homes.

This surge in first time buyers is thankfully helping to prop up the market, although I must add that at Henton Kirkman, for the first six months of this year, 38% of our house sales have been to cash buyers.

Just over a week ago AA mortgages, a division of the AA Breakdown company, became the latest lender to launch a new range of two and five-year fixed mortgages for 90 & 95% Mortgages.

Someone with a 5% deposit would now pay 3.82% for a two-year fixed rate with no fee and £400 cashback.
Last month Yorkshire Building Society cut the rates on its deals for those with small deposits too. The mutual lender's two-year Fix costs 3.25% and is available for a 5% deposit. After the two-year period ends borrowers will go on the lenders "standard variable rate" of 4.74pc.

Of course there's a reason for all this, Lenders are keen to atract those with small deposits as they can charge a far higher rates of interest. For instance, Yorkshire will charge borrowers with a 40% deposit just 0.99% for a two-year fixed deal.

All in all this rise we've seen here in Billericay shows there are still plenty of First Time Buyers still willing and able to get a foot on the property ladder.

If you would like to speak to one of our Mortgage Advisers, please feel free to give the office a ring so we can put you in touch with them.