While the Government’s £80bn Funding for Lending scheme prompted fierce competition between lenders, it was aimed in principle at borrowers with larger deposits.
As a result, first-time buyers struggling to build up sufficient funds for a typical 20% deposit have faced obstacle after obstacle in their attempts to get onto the property ladder.
However, these buyers are now preparing to pounce as it emerges a number of lenders have significantly slashed their rates, with some offering options for those with just a 5% deposit.
In yet more welcome news, there are 65 more mortgages on hand for property hunters with a 10% deposit stored in the bank than there were in 2012.
First-time buyers have had a rough few years: unable to raise a deposit alone, they have been forced to raid the Bank of Mum and Dad or remain trapped in the rental sector. But the increased availability of lower mortgage rates means things are looking up.
Mortgage rates have been slashed in recent months in a heated ‘price war’ between lenders.
This is thanks to the Funding for Lending scheme (FLS), which was introduced back in August to promote borrowing by giving lenders access to cheap finance.
And with the FLS expected to prompt continued competition between lenders, there is potential for rates to drop even lower.