First Time Buyers Hit Christmas Early

The first time buyers market is looking up with a significant increase in mortgage products available.

According to moneysupermarket.com, things are looking up for first time buyers with a 22% increase in the number of mortgage products available since the start of the year.

The number of mortgages available at 80% LTV (Loan to Value) has risen the most since January.

The average interest rates have also fallen on 90% LTV mortgage products and 85% LTV products. A first time buyer with a £150,000 mortgage at 85% LTV will now be repaying £878.63 a month, compared to £964.62 in January.

Unfortunately the average rates on 95% LTV mortgages has increased.

Clare Francis, site editor of moneysupermarket.com said “First time buyers are integral to keeping the housing market moving – if there aren’t enough people jumping on at the bottom the market will eventually grind to a halt.A shortage of first time buyers is evident around the country with many people struggling to sell their properties.

Unless more lenders start offering 90 per cent mortgages at affordable rates, it is difficult to see how this will be resolved. Increased competition would also help to push rates down, bringing the cost of mortgages available at high LTVs closer to the market-leading deals.

She added “Despite Base Rate having been left on hold at 0.5 per cent again this month, an increasing number of economists believe interest rates will start rising sooner rather than later.

Anyone thinking of buying for the first time may therefore be better off acting sooner rather than later as mortgages rates are likely to go up too.

The housing market is also fairly subdued at the moment as the build up to Christmas starts, so it could be a good time to buy as sellers may be more than willing to negotiate on price.”