As the UK braces itself for the upcoming budget, Chancellor Jeremy Hunt is rumoured to be working on an ambitious plan aimed at revitalising the housing market and bolstering homeownership opportunities. Under the proposed government-backed 99% Loan-To-Value Mortgage Scheme, buyers would only have to provide a minimal deposit of 1% of a property’s value, significantly reducing barriers for first-time buyers and those with limited savings.
Property data published by Halifax in January showed that the average property price in Belfast is £195,760, so based on that a 1% deposit would cost a buyer £1957. This would enhance affordability for many first-time buyers, meaning they could get on the property market much more quickly than with traditional deposits of 5 or 10%.
Concerns have been raised that the conservatives are trying to grab headlines and entice votes amongst the under 40’s, a demographic that they are failing to impress according to the latest poll results, rather than provide a solution to declining numbers of young people being able to afford to get on the property ladder. Experts have warned that it could put homeowners at risk of negative equity. However for Belfast renters desperate to get on the property market who are paying out extortionate amounts of money on rent, making it difficult to impossible to save for a mortgage, a 99% loan-to-value mortgage will be a dream come true. Though, increased buyer numbers will increase house prices, so an increase in housing supply is equally important.
Needless to say, the housing market is in crisis and the government needs to do something to tackle this and a 99% loan-to-value mortgage on the cusp of a general election is a vote winner, especially amongst the younger generation who have struggled to get on the property ladder
If you need mortgage advice get in touch with us at Mortgage Solutions, Belfast.
