The End of 10% Deposit?
Well I can imagine it could be for at least for 2020 and I’m talking more on a wider scale of the marketplace. There are some lenders that could consider a 10% deposit but the hoops to jump through to obtain these mortgages aren’t going to fit everyones situation. We also have some lenders occasionally dropping into the marketplace for a few days before swiftly removing products again so it’s hard to say that this is an alive and thriving marketplace
Why Is This The Case?
I recently wrote an article on the subject which in my opinion I think it’s coming down to lenders looking to de-risk their business. The lenders that are willing to consider 10% deposits are putting certain things in place as they believe that it will protect them with the type of business they receive. The rest of the lenders are still snowed under with business even at 15% deposit plus. So from a business perspective if you could receive the level of business that you wanted to but have more secure business due to larger deposits than why would you lower the deposit that you would accept? The Government with their various schemes seem to be stimulating the market enough that lenders don’t need to accept 10% deposits
Will we see 10% deposit mortgages again?
I can’t see the 10% deposit mortgage market returning to anything like normal for 2020 as a minimum and likely not in the 1st quarter of 2021. Maybe looking to mid next year with no stimulation then it may be a bit more regularly available again So those with smaller deposits who felt like they were getting close seem to have been pushed back with a new goal to aim at. In the mortgage broker community I have seen regularly calls for the Government to reintroduce the Help to Buy Mortgage Guarantee Scheme (with the government guaranteeing a % for the lender as opposed to providing a loan) but there are plenty of incentives out there already and the market as a whole right now doesn’t appear that it needs that much more stimulating
It would appear for now, unfortunately for those with a smaller deposit there is no clear idea when it would be possible for these mortgages to be more available so looking at alternative ways to obtain home ownership are more likely including; Gifted Deposits, Charges on Parents Houses, Shared Ownership & Help to Buy amongst others. Please feel free to contact us and we can talk you through them.