First-time buyers are less likely than others to see the need to protect their mortgage payments — so advisers must focus on the facts.
The difficulties facing first-time buyers are well known. That said, brokers have done a great job of helping this group get onto the housing ladder in recent years and we are seeing more first-timers take out mortgages than ever before.
In fact, recent figures from Halifax show that nearly half (46 per cent) of house purchases financed by a mortgage last year were made by first-time buyers.
However, while this is positive, the fact remains that many of these buyers fail to take out the insurance needed to protect themselves.
Unfortunately, many still seem to think that life insurance, critical illness cover and income protection are an unnecessary expense. In part, this may be because many first-timers are single and do not have any dependents, so it can be difficult for them to envisage who would be financially affected if the worst were to happen.
Accord Mortgages has launched a range of 95 per cent LTV mortgages specifically for first-time buyers.
The deals are available at two and five-year fixed rates and come with £1,000 cashback on completion and free standard valuation.
Certain deals are available fee-free, including a two-year fix at 3.94 per cent, or a five-year fix at 4.40 per cent. The lender has also reduced rates on selected high LTV options by up to 0.05 per cent for home buyers with small deposits.
This includes a 3.63 per cent two year fix at 95 per cent LTV with £495 product fee.
Accord mortgage manager Jemma Anderson says: “Spring is a popular time for people taking that first step onto the property ladder, so is the ideal time for us to enhance our product range with specific options aimed to help brokers support their customers with the biggest financial decision of their lives.
House prices rose by 0.2 per cent month-on-month in April, according to the latest Nationwide house price index.
The year-on-year change is 2.6 per cent, and the lender says the average house price is now £213,000. Nationwide chief economist Robert Gardner says: “There was a slight pickup in UK annual house growth in April to 2.6 per cent, from 2.1 per cent in March. House prices rose by 0.2 per cent over the month, after taking account of seasonal factors.”
Mortgage Advice Bureau head of lending Brian Murphy says: “Whilst growth is, at best, incremental, it does at least point to a market which remained robust in the first four months of this year, and one that is performing within the parameters expected by analysts who predicted that annual house price growth would be at around this level in 2018.”
The Nationwide figures are not seasonally adjusted.
Foundation Home Loans director of marketing Jeff Knight says: “Cities in the North of England are experiencing sustained price growth, adding to the already substantial challenge facing those looking to get one foot on the property ladder and pinning their hopes on a home outside the capital.
“Even with stamp duty cuts and low mortgage rates alleviating some of the pain points experienced by renters and buyers alike, affordability continues to remain a concern for the majority of those looking for their first or second home.”
Founder and chief executive of Castle Trust Sean Oldfield is to step down from his role at the lender after seven years at the helm.
Subject to regulatory approval, Oldfield will be replaced as chief executive by Martin Bischoff, who was managing director of retail distribution at Santander for five years to 2017 and recently worked as an executive business adviser at Virgin Money.
The West of England has ben designated a “high housing demand area” by the Ministry for Housing, Communities and Local Government.
The majority of funding will be being put into Oxfordshire and they have agreed £215m of funding which should help grow 100,000 by 2031. Housing Minister Sajid Javid has said Government support should nearly double the amount of homes being built in the region from 4,000 to 7,500 per year.
Bristol, Bath, North Somerset and South Gloucestershire will also receive £3m of funding to help deliver large housing developments