Buyers with no deposits being politely nudged out of the race

Charcol’s Katie Tucker comments: “The mortgage market is readjusting and the housing market will follow. The accommodating lending criteria of the last decade has allowed many people to buy who otherwise wouldn’t have been able to, which has helped push property prices through the roof.”

“Following last weeks mass withdrawal of all mortgages that allowed you to borrow more than the value of your property, first time buyers with no deposit, or existing debt will find it difficult to buy now. I expect to see more parents trying to raise money from their own homes to gift as a deposit, and to see more lenders to find less risky ways to help, such as the First Start mortgages where parents’ spare income can be used. ”

What products are available now?

Miss Tucker continues: “There are lenders still offering 100% and 95% mortgages, for now, and borrowers should seek advice from a whole-of-market mortgage broker very soon if they want one. Newcastle has a 95% fixed rate at 5.25% crucially, with no Higher Lending Charge for a £999 arrangement fee, available exclusively through Charcol (The overall cost for comparison is 7.5% APR).”

“For remortgages up to 75%, Abbey has a market leading 4.99% two year fix for a fee of £2,999 with free valuation and legals. For borrowing up to 90%, West Bromwich has a ten year fix at 5.39% for a fee of £999, including free valuation and legals on remortgages.”

“Variable rates are still expected to offer best value to most as further cuts to Bank rate are expected later in the year. The Cheshire has a 2.15 discount from its SVR for two years, giving a pay rate of 5.19%, for a fee of £1,999 including free valuation and legals on remortgages. For total flexibility, Charcol has an exclusive Early Repayment Charge-free 5 year tracker with a current pay rate of 5.64% for a fee of £799, including free valuation and legals of remortgages, including a ‘droplock’ facility which allows borrowers to drop off the tracker and lock into a fixed rate should they wish to part-way through the mortgage.”