Contractor Mortgages Market Boost
There has been a major contractor mortgages market boost from the new Help To Buy programme implemented by the Government.
Of course, we all know that Help to Buy was brought in by the Government to raise the price of houses so that there would be a feel good factor at the next election. People would feel a bit better off if their houses were rising in price.
However, the contractor mortgages market boost that the Help to Buy scheme has produced has been positive for contractors. It has especially allowed new contractors to get on the property ladder.
Banks and Building Societies
Previously banks and building societies were demanding a 20% deposit from those seeking loans. That was keeping first time buyers out of the market. It is first time buyers who are the lifeblood of the market.
The economic Laws of Supply and Demand kick in here. If there are fewer people competing to buy houses then the price will fall. If there are more people competing for houses then the price will rise. Those first time buyers will become second house buyers at some point.
Average house prices for first time buyers rose by 11% last year compared to 9.5% for existing owners.
Help to Buy Scheme
The Government’s Help to Buy scheme has caused this contractor mortgages market boost. Now, new buyers only have to come up with a 5% deposit instead of a 20% deposit. That makes a huge difference and has brought plenty of people into the market.
First time buyers last year paid an average Â£208,000 for their first homes. A 5% deposit would have come to an average of Â£10,400 which is easily payable by a contractor. A 20% deposit would come to Â£41,600. Even contractors would have to wait a while to gather that deposit.
UK House Prices
Existing owners paid an average of Â£312,000 for a house. UK house prices rose 10% overall last year. With a rise of 10% last year that gives a rise of 21% in two years.
Contractors would be much better to get their contractor mortgages through specialist contractor mortgage brokers as they get better rates and better offers and don’t have to show accounts.
To find out more, or to apply, you should click on Specialist Contractor Mortgages