Low Deposits Are Back!
Posted on 16th March 2018
Rewind 10 years and the property market was just in the starting blocks for a race to the bottom where prices fell dramatically in a very short space of time.
After several years of stability, many first time buyers had saved deposits and started to come back to the market in 2015-2016.
However, due to rental demand the price of property has kept on creeping up in Leicester, as well as other major cities across the UK.
So what can be done to help get these people onto the housing ladder, despite house prices being so incredibly high, probably around 10-15% HIGHER than they were before the 2008 property crash!
Well, banks are lending money at a phenomenal rate, with interest rates still incredibly low, the cost of a new mortgage on a monthly basis is much less than that of rent on the same property, that is broadly speaking and assumes a term of 25+ years on your mortgage.
And they aren't just lending at great rates, they are lending with much lower deposits being requested as well. New Build sites, backed by the government, have for some time been offering 5% deals with assistance to gain another 5% and a whole host of other little "pick-me-ups" to attract first time buyers to the nice and shiny new build estates popping all over the country, not just in Leicester and Leicestershire.
Now, these mortgages are being offered on second-hand residential property, allowing buyers to buy at £200,000 with just a £10,000 deposit. Whilst we aren't quite at the stage of offering 100% of a house's value as a mortgage, we are not a million miles away!
Used sensibly these mortgages are an excellent route onto the housing ladder, you just have to be very careful and take into account that you probably will be paying a slightly higher interest rate for a couple of years.
However, when compared to the price of renting and the delay you would need to get a further few thousand pounds saved up, diving into a house that can last you 3/4/5 years on a 5% deposit is starting to look like a very attractive option.
The easiest way to keep up to date with all the local property prices in Leicester is through our Facebook Page
. We will keep you up to date with the current pricing situation and give handy hints and tips on what you can do to increase the value of your home.
Visit our Facebook Page, "Like" the page and that's it!
Tagged as: Finance & Taxes, First Time Buyers
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