More low-deposit mortgages are available to choose from than at any time since the financial crisis of 2008, according to new figures. The number of deals that need a deposit of 5% or 10% have risen to their highest level since then, data from financial information service Moneyfacts suggests. The extra choice is a boost for first-time buyers, although house prices and mortgage rates are higher than they were for much of the last 17 years. And competition is tough, with homes typically listed for just over a month before a sale is agreed, according to separate figures from property website Zoopla. The UK housing market has been relatively settled in recent times, although buyers still need to navigate uncertainty over interest rates andchanges to stamp dutyin England and Northern Ireland. For buyers able to offer a deposit of 5% of the home loan, there are 442 mortgages to choose from, according to Moneyfacts. Two years ago, the choice was from fewer than half of that total, at 204. Borrowers able to pay a 10% deposit now have 845 products to choose from, up from 684 in April 2023. However, they still have to pay a mortgage rate of well over 5% on average, while a borrower who pays a 40% deposit typically pays a rate of under 5%. It has been hard for many prospective first-time buyers to save due to the rising cost of renting in recent years. Doug Hepper, 30, from Tewkesbury, is a dad and wants to buy his first home. But due to the cost of living doing so is almost impossible in the short-term, he said. "When I grew up, I thought the normal thing was to get married, have kids and buy a house around the time of being 30," he added. "The kid came first but I never thought the buying the house part would be so far out of reach." But Rachel Springall, from Moneyfacts, said there was a flourishing choice of mortgages for those whose ability to pay a deposit is stretched. "A rise in product availability for aspiring homeowners is a healthy step in the right direction," she said. However, she said only 6% of all deals available to borrowers across fixed and variable mortgages had a deposit requirement of 5%, so there was still "room for improvement". Mortgage rates remain difficult to predict owing touncertainty created by US tariff policyon the wider economy. While securing a mortgage is one thing, buyers also need to act relatively quickly when it comes to finding a new home, data suggests. Homes in England and Wales spend an average of 36 days on the market before a sale is agreed, according to news figures from the property portal Zoopla. Sales were agreed on half of homes within two months of being listed, it said. To complete a sale, sellers and buyers will typically need another four to six months, depending on the complexity of the transaction. The fastest sales were agreed for two-bedroom homes, at an average of 23 days, while homes with four bedrooms or more typically took an extra 15 days. Homes in northern regions of England tended to sell faster than homes in the south, where prices are higher, it said. Even so, the fastest selling, with an agreed sale taking an average of 19 days, had a north-south mix, with Manchester and the London borough of Waltham Forest hitting that mark. "Households that are thinking about listing their home and moving in 2025 need to set their asking price at the right level and take the advice of local agents," said Richard Donnell, executive director at Zoopla. "Buyers have a lot more choice of homes for sale than a year ago. Aiming too high on the asking price is likely to impact saleability and how long you may have to wait to agree a sale." Zoopla uses a median average figure (the mid-point) for its data. It also discards homes that have been listed for more than six months, as it considers them to be unlikely to sell. Get our flagship newsletter with all the headlines you need to start the day.Sign up here.
Low-deposit mortgage deals highest for 17 years
TruthLens AI Suggested Headline:
"Increase in Low-Deposit Mortgage Options Signals Change in UK Housing Market"
Bbc News
8.0
TruthLens AI Summary
Recent data from Moneyfacts indicates that the number of low-deposit mortgage options available in the UK has reached its highest level since the financial crisis of 2008. Specifically, the availability of mortgages requiring a 5% or 10% deposit has significantly increased, with 442 products for 5% deposits and 845 for 10% deposits. This rise in options is particularly beneficial for first-time buyers who have faced challenges due to the higher house prices and mortgage rates that have persisted over the years. While the increased competition in the housing market has provided more choices for prospective buyers, many still struggle with the financial implications of higher living costs and mortgage rates, which average well above 5% for lower deposits. This situation has made homeownership appear out of reach for many young families, as illustrated by the experience of Doug Hepper, who expressed frustration over the difficulty of saving for a deposit amidst rising rental costs.
Despite the current challenges, financial experts like Rachel Springall from Moneyfacts view the increase in mortgage options as a positive development for aspiring homeowners. However, she also cautions that only a small percentage of the mortgage deals available require a 5% deposit, indicating that there is still significant room for improvement in this area. The UK housing market has shown some stability, with homes typically selling within an average of 36 days, although this varies by region and property type. For instance, two-bedroom homes tend to sell the fastest, averaging 23 days on the market. As buyers navigate this competitive landscape, they are advised to act swiftly in securing a property, especially with factors like fluctuating mortgage rates and potential changes in stamp duty looming over the market. The overall sentiment suggests that while options for low-deposit mortgages are improving, prospective buyers must remain vigilant and responsive to the current economic conditions.
TruthLens AI Analysis
The article provides insights into the current state of low-deposit mortgage options in the UK, highlighting a significant increase in choices available for prospective homeowners. This information is particularly relevant in the context of the ongoing economic challenges faced by many individuals, especially first-time buyers.
Increase in Mortgage Options
The article states that the number of low-deposit mortgage deals has risen to its highest level since the 2008 financial crisis, with a notable increase in options for deposits of 5% and 10%. This change aims to create a sense of optimism among potential homebuyers, suggesting that the market is becoming more accessible, especially for first-time buyers who have historically struggled to enter the housing market.
Challenges Faced by Buyers
Despite the increase in available mortgage products, the article also emphasizes the challenges that remain, such as higher house prices and mortgage rates compared to the previous years. This dual narrative of increased availability contrasted with persistent financial hurdles creates a complex picture of the housing market, potentially leading readers to feel a mix of hope and frustration.
Public Sentiment and Economic Implications
The personal accounts, such as that of Doug Hepper, provide a human element to the statistics, illustrating the emotional and practical struggles of individuals trying to navigate the housing market. This could foster a sense of empathy among readers and encourage discussions around housing affordability and economic policy. The mention of rising rental costs further highlights the strain on potential buyers, reinforcing the idea that while more options are available, financial barriers remain significant.
Market Dynamics
The article notes that homes are selling quickly, indicating a competitive market environment. This could lead to a sense of urgency among potential buyers but may also contribute to rising prices if demand continues to outpace supply. The implications for the broader economy are notable, as increased competition in the housing market could influence consumer spending and investment in related sectors.
Potential Manipulation and Bias
While the article presents factual data, the framing could be seen as somewhat manipulative. By emphasizing the increase in mortgage options without equally highlighting the ongoing financial challenges, it may create a misleading sense of security for potential buyers. The choice of language, focusing on the "healthy step in the right direction," can suggest a more positive outlook than the data might fully support. The article's trustworthiness is bolstered by the use of credible data from Moneyfacts and Zoopla, though the selective presentation of information could lead to a skewed perception of the overall housing market situation. The narrative may resonate more with younger demographics and first-time buyers, who are most affected by these developments. In terms of broader market impacts, this news could influence investor sentiment in real estate and related sectors. Stocks related to homebuilding and mortgage financing could see fluctuations based on how these trends are perceived by the market. There is no direct mention of artificial intelligence in the writing style or content; however, the structured presentation and data sourcing suggest a methodical approach that could be enhanced by AI tools in data analysis. The article does not appear to have a significant impact on global power dynamics or current events, as it is primarily focused on domestic housing issues. Ultimately, while the article conveys valuable information regarding the mortgage landscape, it also leaves readers with an impression of both opportunity and caution, reflecting the complex realities of the current economic environment. The balance of optimism and realism is crucial in shaping public perception and action regarding homeownership.