27th March 2024 UPDATE –
Accord and YBS announce a new £5,000 deposit mortgage.
This is available to First Time Buyers and is on properties worth up to £500,000. Meaning we now have our 1% deposit mortgage!
The mortgage is on a 5 year fixed rate of 5.99%, which is higher than the 5.59% they are offering those with a 5% deposit, but if it saves you having to wait another 3 years paying rent to a landlord then maybe it’s worth he extra cost.
Full details in the graphic below.
This offer will be extremely popular and if you’re interested you should get in touch quickly.
On mobile press the WhatsApp button
On computer/tablet fill in the form above
UPDATE – The conservative government decided against taking any initiatives to help people onto the property ladder. I’ll leave this page in posterity.
Here at Stamford Home Finance I aim to keep my clients informed. Here is what we know about the potential 99% mortgage scheme so far:
The 1% Deposit Mortgage Scheme:
Overview:
The 1% Deposit Mortgage Plan: What We Know
The UK government is thinking about making a big change for people who want to buy their first home. They want to introduce a plan where you only need to save 1% of a house’s price as your first deposit.
Right now, if you’re buying a house for the first time, you might need to save 5% of the price to start. But with this new plan, you would only need to save 1%, which makes it much easier and quicker to start buying your own home.
When Could This Happen?
The government is thinking about this 1% deposit idea as part of their plans to help more people buy homes. It might be announced soon, and it’s all about making it easier for younger people or anyone buying a home for the first time.
Who Would This Help?
This plan is mainly for people who want to buy their first home but find it hard to save a lot of money for a deposit. It’s especially aimed at helping younger people or families who want to own their home but can’t because saving up is tough with how expensive things are.
Conclusion
This new 1% deposit plan is a big change for buying homes in the UK. It could make it a lot easier for first-time buyers to get their homes, but it also brings up some important questions about housing in the future. We’ll keep watching to see how this plan develops.
If you would like to be kept up-to-date when/if this scheme launches just fill in your details below and I’ll be in touch —————————————————–v
Table of Contents
In More Detail…
What We Know So Far
The UK government is thinking about making a big change for people who want to buy their first home. They are reportedly going to introduce a plan where you only need to save 1% of a house’s price as your first deposit.
Right now, if you’re buying a house for the first time, you might need to save 5% of the price to start. But with this new plan, you would only need to save 1%, which makes it much easier and quicker to start buying your own home.
Currently, under the mortgage guarantee scheme, first-time buyers can obtain a mortgage with a 5% deposit. However, the new proposal would allow them to secure a mortgage with just a 1% deposit, dramatically reducing the upfront cost of purchasing a home.
For example, under the new scheme, a buyer looking to purchase a property at the average UK house price of £288,000 would only need to provide a deposit of £2,880. This contrasts sharply with the current 5% deposit requirement, which would need a deposit of £14,400 for the same home.
When Is It Likely to Happen?
The government’s consideration of the 1% deposit mortgage scheme aligns with Chancellor Jeremy Hunt’s broader economic plans and is expected to be a key feature in the upcoming budget announcement on 6 March 2024.
The initiative is part of the government’s effort to make homeownership more accessible, particularly for younger generations who have struggled to accumulate sufficient savings for larger deposits.
Who Could Benefit?
The main beneficiaries of the 1% deposit mortgage scheme are potential first-time homebuyers, especially younger individuals and families who have found it challenging to save for a substantial deposit amidst rising living costs and property prices. By lowering the deposit requirement, the scheme aims to make homeownership a more achievable goal for ‘generation rent’.
Potential Risks and Criticisms
Despite the potential benefits, the 1% deposit mortgage scheme has faced criticism from various experts. Critics argue that while the scheme might provide a short-term boost to homeownership rates, it fails to address the underlying issue of housing supply shortages in the UK. There is a concern that the increased demand generated by the scheme could drive up house prices, exacerbating affordability issues in the long run.
Labour’s Deputy Leader Angela Rayner has criticised the government for not addressing the supply of affordable homes and for failing to reform the planning system, which has contributed to the housing crisis. Additionally, some financial experts, including Money Saving Expert Martin Lewis, have warned that lower deposit mortgages often come with higher interest rates, resulting in more expensive mortgage repayments over time.
Conclusion
The 1% deposit mortgage scheme represents a significant shift in the UK’s approach to homeownership and mortgage lending. While it offers a potentially transformative opportunity for first-time buyers, it also raises important questions about the long-term implications for the housing market and overall affordability.
As the government finalises its plans, the impact of this scheme on both individual homebuyers and the broader housing market will be closely monitored.
Ministers’ 99% mortgage idea
“This radical approach to dismantling the towering barriers to home ownership will sound fantastic to those struggling to find a larger deposit,” said Peter Stamford, the founder and lead adviser for Moor Mortgages, commenting on the speculation about 99% loan-to-value (LTV) mortgages, first reported in the Independent.
Govt considers ‘radical approach’ to homeownership with 1% deposit mortgages
Peter Stamford at The Mortgage Uni said the “sting in the tail” would be the higher interest rates that come with low deposits.
Govt considers ‘radical approach’ to homeownership with 1% deposit mortgages
The UK government is exploring a “radical approach to dismantling the towering barriers to homeownership” by offering 1 per cent mortgages, according to The Mortgage Uni mortgage expert, Peter Stamford The UK government is considering introducing 1 per cent deposit mortgages as part of its new housing strategy, to help young people and first-time buyers purchase their homes. The initiative is designed to remove the barrier of a large deposit and could be announced in the Spring Budget. Stamford described this idea as “fantastic” for those struggling to find a larger deposit
1% deposit mortgages: a good option for first-time buyers?
Mortgage brokers have warned that the "high-stakes gamble" could fuel a house price bubble that made home ownership even more unaffordable for future would-be buyers. Peter Stamford, the founder of Moor Mortgages, told The Intermediary that the initiative could "cause the property market to overheat, driving prices up further".
Let’s dive into the process you’ll go through, step by step.
With a clear understanding of your budget, you can start your exciting property search. Explore listings from different estate agents as they often have different options available. Don’t hesitate to ask questions about the local areas and the condition of the properties you’re interested in.
When you finally find your dream home, it’s time to make an offer! The great news is that with your DIP secured, you’re in an excellent position to make a solid offer on the property. Once your offer is accepted, it’s time to move forward with your application.
Your mortgage adviser will guide you through the full mortgage application process. This is when the lender will also arrange for a mortgage valuation to ensure everything is in order
The solicitors or conveyancers will handle the legal side of things.
They will draw up contracts for the purchase and carefully check all the details to ensure accuracy. They’ll look out for any tricky clauses in the title deeds and examine leases for potential future issues.
Exciting times ahead!
Your solicitor and the seller’s solicitor will exchange contracts. At this stage, you haven’t made the full payment yet, but you have legally agreed to buy the property on a specific date. This is also when you hand over your deposit money and must have buildings insurance
The big day has arrived! Completion takes place once you’ve exchanged contracts and paid for your new home in full. The money is transferred to the seller’s solicitor, and finally, the keys are released to you. It’s time to celebrate and step into your new home!
Congratulations on taking the exciting step of buying your home with Moor Mortgages! We want to ensure that you have a relaxing and stress-free experience, so it’s important to be aware of some additional costs involved in the process. Don’t worry, we’ll break it down for you in a friendly and easy-to-understand way
If you’re a first-time buyer, you’ll only need to pay Stamp Duty if the property you’re purchasing is worth over £425,000. But even then, there’s good news – you’ll still receive some relief, unless the property is valued over £625,000. If you are moving house Stamp Duty bands are currently:
Nothing on the first £250,000
5% between £250,001-£925,000
10% between £925,001 and £1.5 million
12% above £1.5 million
Before your mortgage lender approves your loan, they’ll need to confirm the value of the property. As part of the process, they’ll arrange a valuation for lending purposes. The great news is that some lenders may not charge you for this, depending on the type of mortgage product you choose.
In addition to the valuation, you might also consider getting a survey. There are two types: a homebuyer report and a full structural survey. A homebuyer report includes a valuation and provides a detailed report on the state of the property, highlighting any necessary work. On the other hand, a full structural survey is more comprehensive and is recommended if you’re planning extensive renovations, or if the property is older or of unusual construction. We’ll help you understand which option is best for you.
Buying a house involves navigating through a maze of laws and legal requirements. That’s why having a reliable conveyancer or solicitor is essential. They’ll guide you through contracts and ensure everything is in order. Their role also includes liaising with the seller’s solicitor to keep the purchase on track. Conveyancing fees can vary, so it’s worth getting quotes from different providers.
At Moor Mortgages, we offer more than just mortgage advice. We’re here to make your home buying experience enjoyable and hassle-free. Your dedicated advisor will assist you throughout the entire application process, finding the best rates and ensuring everything is handled smoothly. We charge £199 fixed fee, payable only if you choose to apply for a Mortgage. Can’t say fairer than that.
When it’s time to move into your new home, you may need to budget for removal fees to transfer your possessions
We’re here to help you make informed decisions and navigate the exciting journey of buying your first home. Let Moor Mortgages be your trusted partner, ensuring a relaxed and enjoyable experience.
Why Stamford Home Finance?
- Raising the standards of financial advice
- Friendly, personable advice
- Making financial advice accessible to all
- Trusted & stress-free financial advice
As seen in:
