Housebuyers warned they have 10 weeks to complete before rule change

With the stamp duty extension in England ending on Wednesday June 30th, home buyers have just under ten weeks to finalize their purchase MoneySuperMarket.

The period of 70 days is just under the 77 days that the average property purchase needs according to new research on the price comparison website. The average purchase for a first-time buyer is 99; Moving companies take 88 days to complete. while this repossession takes 71 days. The result is that in the early stages of a purchase, many buyers are likely to be in a rush to get their new home completed.

The program was originally supposed to end in March, but was extended in the Chancellor’s March budget. The decision sparked a 421% increase in mortgage inquiries on the MoneySuperMarket website, with 90% of loan to value (LTV) transactions accounting for 39% of that number.

The vacation extension has proven popular: almost two-thirds (63%) of home hunters are in the market because of the program. 25 to 34 year olds are most likely to use this. 71% have bought or say they intended to do so because of its launch.

The same MoneySuperMarket research also shows an increase in the number of 95% LTV mortgages in the market. There are currently 70 offers available, up from 12 at the start of the year – a 483% increase – although the 214 offers available to home buyers in January 2020 were still down a substantial 67%.

The government’s introduction of the 95% mortgage system on Monday was well received by the industry. Many major lenders announced that they would be launching new products this week or early next month. Interest in the program was also attracted by consumers with MoneySuperMarket, who saw a 95% increase in first-time mortgage requests by 95% in the seven days between 04/12/2021 and 04/19/2021 when the announcement was made.

Search type

Increase in the 95% mortgage search on MoneySuperMarket between April 12, 2021 and April 19, 2021

First time buyer

71.3%

Home movers

26.1%

Rescheduling

20.4%

Fixed rate mortgages continue to receive the greatest interest from visitors to the MoneySuperMarket website. 2-year fixed rate offers are more popular than 5-year fixed rate offers with first-time buyers looking to get a new mortgage, homeowners, and buyers to let buyers in.

product

Buy to rent

First time buyer

Moving company

Re-mortgage lender

2 years fixed

54%

28%

45%

45%

5 years fixed

26%

28%

24%

35%

(Products viewed by visitors to the MoneySuperMarket website in the first quarter of 2021)

After the end of June deadline, the stamp duty zero rate band will be set at £ 250,000 by the end of September – twice the standard level. As of October 1st, the usual level of £ 125,000 will return.

Jo Thornhill, MoneySuperMarket’s financial expert, said: “The stamp duty extension has been very popular, but those who want to take advantage of it should hurry as the deadline is now 10 weeks. Since the average home purchase takes 77 days, many will cut it well. However, if you are chainless and just started looking, you should still have plenty of time to act now.

“Our research shows that the situation for first-time buyers is slowly improving: there are significantly more 95% LTV deals on the market than in January, and after the government’s new 95% mortgage guarantee system started on Monday, mortgage availability for buyers with a down payment of 5% should increase the number.

“While we welcome the government’s moves, there is still a long way to go to alleviate the challenges for first-time buyers.” We want the government to think about long-term solutions to make home ownership a reality for more Britons, especially those who feel it is out of their reach.

“With the current economic environment remaining uncertain, it is not surprising that the most popular mortgages are in place. Homeowners are opting for 2-year deals in greater numbers than 5-year deals – which suggests that people are more satisfied with hedging their bets in the short term.

For more information on 95% mortgages, see Here.

MoneySuperMarket’s top tips for first-time buyers:

Understand your budget

Understanding your budget is important in order to know what you can afford. Comparing mortgages can give you an idea of ​​how much you can possibly budget for. You can compare the monthly mortgage repayments you need to make for each business, as well as information about additional moving fees you will have to pay and the flexibility of the mortgage.

Decide which mortgage is right for you

When comparing mortgage deals, you need to decide whether you want a fixed or adjustable rate mortgage. With a fixed rate mortgage, your monthly repayments stay the same for the life of the deal, which makes budgeting easier. With a variable rate mortgage, your monthly repayments may vary depending on the interest rates set by the Bank of England.

Do some research

Once you know your spending limits, you can start searching for real estate. Start by researching the area you plan to shop in, taking into account property prices, proximity to local schools, public transport links, and anything else that could influence your decision.

Once you’ve decided on an area, contact real estate agents and search the internet for a shortlist of potential homes. Then arrange viewings as soon as possible.

Increase your chances of getting a mortgage

Once you have an idea of ​​the property and mortgage that you want, now is the time to increase your chances of acceptance. For first-time buyers with smaller deposits, many lenders have done what they consider riskier deals. To give yourself the best chance of securing your first home, it is important that you pay at least a 10% down payment.

It is important that you check your creditworthiness before applying for a mortgage to make sure it is up to date. A better score could unlock a wider range of deals. Hence, it is a good idea to spend the time practicing small financial steps to improve your score. This can sometimes be so quick and easy that you make sure you’re on the electoral roll and close any credit cards or accounts that you no longer use.

Stay calm

If you are still feeling a little overwhelmed when comparing mortgages, calm down and speak to a mortgage broker who can advise you on which deals best suit your needs.

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