In fact, buyers and vendors achieve more success when things go in each other’s favour. This is why the news that Lloyds has unveiled the return of a 100% mortgage for first-time buyers should be great news for vendors as well as buyers.
With Lloyds being the largest mortgage lender in the country, this move will impact on many people. It may also impact on other firm’s with Lloyds often leading the way when it comes to changes in the mortgage market. Barclays will point to their “Family Springboard” deal as an indicator they have offered a 100% mortgage to first-time buyers of late, but it looks as though the Lloyds offering will be more attractive than the Barclays offer.
Many first-time buyers turn to family members for support and guidance
The Lloyds scheme is called “Lend A Hand” and first-time buyers will be able to borrow up to £500,000 without having to offer a deposit. With many lenders looking for a 5% deposit, at least, with respect to first-time buyers, this is an offer that is likely to be of benefit and interest to many people looking to step onto the property ladder.
However, this offering is going to be available to everyone. The new mortgage offer will only be available to buyers who can receive support from family members. Lloyds is looking for a family member to place a sum equivalent to 10% of the property value into a savings account, which will provide a return of 2.5%. This is a return that Lloyds says compares well with the market.
More mortgage options will be good for the market
Vim Maru is the Group Director of Lloyds Banking Group and he said; “We are committed to lending £30bn to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and ‘Lend a Hand’ is one of the ways we will do this. At the heart of this market-leading product is helping to address the biggest challenge first-time buyers face getting on to the property ladder while rewarding loyal customers in a low-rate environment.”
Not everyone is able to rely on family members for support in this manner, so it is not as though there will be universal happiness at this style of mortgage offering. However, if it makes it easier for some buyers, it is going to be positive news for the market. Anything which increases the number of buyers has to be good for vendors too, and it can only be hoped that buyers and vendors will benefit from this new style of mortgage.
At Austin Property Services, we understand the importance of bringing buyers and vendors together. If you are looking to sell your home or you need guidance in promoting your property, get in touch and we will be more than happy to assist you.