Demand for 100% mortgages doubles
June 29, 2007
With the recent interest rate rises coupled with the cost of purchasing property in the UK, many consumers have had to find solutions to try and get onto the property ladder, and many have turned to 100 percent mortgages, where no upfront deposit is required.
Because of the hefty cost of buying a property in the UK many buyers have been unable to raise the necessary deposit. As a result of this, according to recent reports, the availability of 100 percent mortgages has doubled in the space of a year.
First time buyers have particular problems trying to raise the deposit needed on a standard mortgage because they have no previous property from which to use equity, and therefore 100 percent mortgages have become particularly popular amongst this group. The rising availability of 100 percent mortgages has given younger buyers, first time buyers, and those with no savings, the chance to purchase a property without having to find a deposit first.
The survey into the availability and popularity of 100 percent mortgages was carried out by MoneyExpert. The data from the survey indicated that 100 percent mortgages had more than doubled, rising by around 112 percent.
In May 2006 the number of 100% mortgages stood at sixty but in May 2007, just one year later, this figure had risen to 127. The increased availability of this type of mortgage appears to be another way in which lenders are trying to increase solutions for consumers to get onto the property ladder in the current economic climate.
A MoneyExpert official stated: “Affordability is the buzz word at the moment as lenders look to find new ways to bring first-time buyers into the property market. Offering 100 per cent mortgages is another example of this, as saving for a deposit on even the average property can take years.”
Alan Wright
29th June 2007
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