Mortgage bulletin for week commencing Monday 6 January

Posted 6 January 2014

The number of first-time buyers continued to increase in 2013, according to the annual Halifax First Time Buyer Review. Last year the number of first-time buyers grew by an estimated 22% to 265,000; the largest annual rise since 2001. This was the second consecutive annual increase following a 13% rise to 218,000 in 2012.

Martin Ellis, housing economist at Halifax, says: "Low interest rates, improvements in consumer confidence and government schemes, such as Help to Buy, all appear to have contributed to the rise in the number of first-time buyers."

Lloyds Bank has launched its Help to Buy mortgage products, allowing homebuyers to access a mortgage with just a 5% deposit. The product range, available up to 95% loan-to-value (LTV), include a two-year fixed rate of 5.19% with a £995 fee and 5.59% with no fees for homebuyers with a Lloyds Bank current account. Rates for those without a Lloyds Bank current account are 5.39% with a £995 fee or 5.79% with no fees.

Marc Page, Lloyds Bank mortgages director, says: "Our participation in the Help to Buy scheme allows us to make mortgages more accessible for more people. The scheme has so far been successful in helping people onto the ladder, and it has also given existing home owners more options, allowing them to move forward and take the next steps to their second and third properties."

The Royal Bank of Scotland (RBS) has two 95% LTV products available under the Help to Buy scheme. The bank's two-year fixed-rate is 4.99%, while the five-year fixed-rate mortgage is 5.49%. Both products revert to a variable rate after the fixed period, currently 4%.

In Wales, Principality Building Society has joined the Help to Buy Wales equity loan scheme. Mortgages are available through its broker channel to homebuyers purchasing a new-build property who meet the Help to Buy Wales scheme criteria up to a maximum value of £300,000. Principality is offering customers in Wales a 95% LTV five-year fixed-rate deal at 4.99% with a £99 mortgage commitment fee.

Graeme Yorston, Principality Group chief executive, says: "We are pleased to announce that Principality will be accepting mortgage applications for the Help to Buy equity loan scheme in Wales, as part of efforts to help the housing market move forward. We believe that schemes such as this will ignite the market and help people to move onto and up the housing ladder."

For those with a 15% deposit, Principality's 85% LTV two-year fixed mortgage rate is 2.89% while the same product fixed for three years is 3.29%. Both 85% LTV mortgages have fees of £999.

Leeds Building Society has cut the rates on its Welcome Mortgage range by up to 0.34%. The products offer homebuyers an initial period of interest-free repayments of three or six months, and come with a £200 cashback incentive and £199 application fee. The two-year fixed rate available up to 80% LTV has been reduced by 0.34% from 3.39% to 3.05%, with the two-year fixed-rate 85% LTV version being lowered from 4.07% to 3.74%.

The society has also cut its five-year fixed-rate Welcome Mortgage rates by 0.11% to 4.12% up to 80% LTV and by 0.22% to 4.23% up to 85% LTV. The three-year fixed-rate up to 90% LTV is 4.71% with an initial three months interest-free period or 5.22% for six months interest-free. All Leeds' Welcome Mortgages offer a free standard valuation up to £335 and 10% capital repayments are allowed each year without penalty. Early redemption charges (ERCs) are payable and vary from 3% to 5% in the first year depending on the length of the fixed term, reducing each year.

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