Since Covid-19 hit the UK in 2020 it has had a massive economic impact all over the world. The UK now sees a 5.4% unemployment rate with many businesses counting the cost, tourism is crumbling and who knows when we can have a holiday abroad again.
In order to give the UK economy a boost today’s budget has seen the Chancellor, Rushi Sunak announcing the return of the 5% deposit scheme with the Prime Minister quoting “I want generation rent to become generation buy and these 95% mortgage guarantees help to deliver this promise.” Johnson has also said he didn’t want the younger generation today to feel that they were being excluded from the housing market, and this would give them the chance to jump on the property ladder.
Recently lenders had removed low deposit mortgages, and for many people having to raise a deposit of 10%, 15%, or more would be a massive struggle so the announcement of a 5% deposit return will be well received.
The new scheme will be for first-time buyers as well as current homeowners looking to buy a house of up to £600,000 with a 5% deposit. 95% mortgages will be available from lenders from April 2021 with lenders having the option to purchase a government guarantee that compensates them for a portion of their losses in the event of a foreclosure. All lenders under the scheme will also offer up to five-year fixed-rate mortgages as part of their range of products including options for customers with smaller deposits who want the security and predictability of a mortgage with a fixed rate over a longer-term.
Lenders have applauded the return of 95% mortgages giving the economy a boost that is needed to the housing market to bring a younger generation onto the housing ladder.
So with the return of 95% mortgage sales from spring onwards the housing market will see major increases and certainly an influx of sales inquiries making a dream of owning their own house become a reality.
Stephen Ridgeway, head of Edward Mellor Financial Services said ”The return of 95% lending will be the difference for thousands of buyers being able to purchase a home. The increase of potential buyers can also only have a positive impact on vendors looking to sell. I look forward to our mortgage advisers being able to help even more people achieve their aim of owning their own home”.
Our mortgage advisors can help you look at the lenders offering 95% mortgage deals as well as advising on personal pensions, investments, savings and more. Our conversations confidential and no-obligation so get in touch today!. Or you can call us on 0161 443 4830 or email [email protected] – we’re here to help.
Note: The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested. Your home may be repossessed if you do not keep up repayments on your mortgage.