Big banks like Nationwide have tripled the minimum deposit for first time buyers - not ideal!
2 questions I have,
what does this mean for first time buyers and their chances to getting on the properrty ladder?
does anyone see this having a significant impact on the market at large?
Thanks you
Ignacio
Hi Ignacio, apologies for the late reply.
To answer your first question, yes, the increase in the required minimum deposit will likely make it more difficult for first-time buyers to get on the property ladder. The Stamp Duty holiday didn’t help first-time buyers either, with demand shooting up amongst people already on the property ladder and prices reflecting that.
However, there is hope in the form of what Boris Johnson wants to introduce. He wants to introduce what he calls ‘Generation Buy’, which he hopes will give first-time buyers access to a more manageable mortgage deposit (as low as 5%). This is similar to the Help to Buy mortgage guarantee scheme that came to an end in late 2016, which also gave first-time buyers better access to a low-deposit mortgage (the government did this by giving mortgage lenders the option to obtain a guarantee on a 95% mortgage).
For your second question, it’s difficult to tell right now what the impact on the market at large will be, especially (and I hate saying this) during these uncertain times. If Boris Johnson’s government can help first-time buyers secure a mortgage with less than a 5% deposit, I believe it will certainly help them get on the ladder. It’s just a case of how many first-time buyers will be looking for property at this particular moment in time!
I hope this helps a little bit, but if you have any further questions please feel free to reach out.
All the best,
– Tom