Mortgages available with only 5% deposit – What an opportunity to buy your first property or upsize your current property

10th June 2021 posted in PROPERTY NEWS

We know it is challenging for people to buy homes, especially with the size of deposit required. However, there is an excellent opportunity for first-time buyers and people looking to move to a larger property.

Over the past year, the demand for larger homes has increased considerably, which is understandable.

Of course, desire is one thing, but the cost of upsizing is another matter entirely. However, help is at hand with the 95% mortgage guarantee scheme which is now in effect.

Do you need help saving for a mortgage?

The criteria of the scheme is based on:

·         Buyers can purchase property valued up to £600,000 with a 5% deposit

·         The scheme is open to first-time buyers, and existing homeowners

·         The scheme is not limited to new-build property, it can be used on all manner of property

·         The scheme aims to help buyers by incentivising lenders to provide more affordable mortgages to more buyers

Lenders involved with the scheme include:

·         HSBC

·         Barclays

·         Santander

·         NatWest

·         Lloyds

Do you know the Royston housing market?

According to Rightmove, as of June 2021, Royston house prices are as follows:

Properties in Royston had an overall average price of £383,196 over the last year.

The majority of sales in Royston during the last year were terraced properties, selling for an average price of £312,056. Detached properties sold for an average of £594,034, with semi-detached properties fetching £369,060.

Overall, sold prices in Royston over the last year were 9% up on the previous year and 12% up on the 2018 peak of £342,309.

The average price is well below the maximum price criteria, so prospective buyers don’t have to worry about that.

5% of £383,000 equates to just over £19,000. Households will still have to save to achieve this goal, but it will hopefully be in reach for most households.

By comparison, any buyer having to place a 20% deposit on the average price paid for property in Royston would need to save £76,600. This is a sum that would be beyond many prospective buyers, so you get an immediate feel for how important the 5% mortgage guarantee scheme is.

If you are a first-time buyer, or you are keen to upsize your current property, this is a tremendous opportunity which might change your outlook on buying a property. If you would like to discuss your options in and around Royston, please get in touch, and we will be happy to help you.

Industry professionals back the mortgage guarantee scheme

It is always helpful to hear the thoughts of leading industry observers on property matters, and there is support for this new mortgage guarantee scheme.

Tim Bannister, Rightmove’s director of property data, says: “The new mortgage scheme could help some first-time buyers bring their plans forward if they have a lower deposit but are still able to pass the affordability checks, and will be welcomed by those who last year we’re struggling to come up with a 15 or 20% deposit. Although the number of new properties coming to the market is improving, it’s still nowhere near enough to satisfy the buyer demand that is already at record levels, and so more people choosing to trade up will be vital to open up more choice at the start of the property ladder.”

Tim Bannister also said; “The combination of not enough stock and high demand will help underpin prices, and over the past five years asking prices of a typical first-time buyer home have already increased by £23,000 on average, so those who can now afford to buy a home will be trying to make the move quickly in case prices rise further.”

Richard Donnell, director of research and insight at Zoopla, adds: “Supporting buyers with small deposits is key to widening access to homeownership for a part of the mortgage market that has been under-served. It is not a mass-market solution and it’s vital we have a competitive market for lending up to 90% LTV for a healthy housing market. Greater availability of 95% mortgages will have the greatest benefits for buyers in lower value housing markets in northern England and Scotland where a 95% mortgage is more attainable. The scheme will have less impact for buyers in southern England where high house prices are a major barrier to being able to afford a 95% mortgage. This aligns to the levelling up narrative and policy approach of government.”

If you are keen to make a move in, around or out of Royston, we are here to assist you.

In line with Government guidelines, our Royston branch is open and is staffed with sales and lettings personnel.  If you have any queries or need advice on property sales and lettings then please call 01763 245121 or email