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20 Mar 2015

How Help to Buy has helped first-time buyers since its introduction

Author: Greg May

With the introduction of the Help to Buy schemes, Greg May, Director of Romans Mortgage Services discusses how getting a mortgage with a deposit as low as 5% has fast become something that is popular amongst first-time buyers and families with low incomes.

Over 80,000 consumers have used the schemes to buy their first home since its implementation and the number of mortgage products requiring 5% deposits is at a seven-year high, which comes as good news for potential homeowners who can only save enough money for a small deposit.

At their highest since May 2008, figures show that there are 195 mortgage products available at 95% loan-to-value (LTV), which is a benefit, considering that house prices are continuing to rise due to a variety of reasons such as the lack of new homes being constructed and the increase of buy-to-let landlords keeping their properties for longer than an owner-occupier would, thus leading to lower stocks in estate agents.

The popularity and abundance of the 95% products is also evidence of the confidence being felt by the providers, as they become more willing to lend at higher risk levels. data suggests that Help to Buy has been the catalyst behind the revival of affordable mortgages for first-time buyers. With only certain lenders participating in the scheme when the two Help to Buy schemes were first introduced back in April and October 2013, other providers promptly recognised the need to compete in the sector.

The ongoing competition has driven down mortgage rates in a well-publicised mortgage war which continues to this day. With rates reaching their lowest ever levels in the past couple of months, the average fixed rate has now dropped to just 4.90% for a two-year 95% mortgage, meaning now could be a good time to consider utilising the variety of available products to make the move to buy your first home.

With prices consistently changing, it is important that you seek the advice of a professional mortgage adviser who can talk you through what is right for your personal circumstances.

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Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

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