New Market for First Time Buyers?

The increase in base rate has stifled any growth in the market. But it could spell good news for one segment of first time buyers.

typical first time buyer apartment

Lenders Battling to Offer the Most Competitive Deals

The increase in base rate has stifled any growth in the market. But it could spell good news for one segment of first time buyers.

2018 looks set to be another tough year in the mortgage market. Signs of economic growth last year stuttered when the Bank of England increased the Base Rate. It might have been only a quarter of a percent, but the message that it would not be the first increase was enough to provoke a sense of caution among both buyers and those considering selling their homes.

The net result? The overall housing market has slowed again, and mortgage brokers in Essex have seen a drop of around five percent in the overall number of mortgages approved compared with the same time last year. As a result, they have also seen lenders falling over one another to offer the best deal. This, however, is tempered by a lack of owners taking the plunge and placing properties up for sale.

Good news for one sector

The one sector that looks to be coming out a winner is those first time buyers who are looking to purchase a new build. With no chain in either direction, the purchase process is at its simplest, and lenders are in fierce competition with one another to offer them the best mortgage deal.

Look beyond the rate

Despite the slight increase in base rate, some lenders are offering five-year fixed deals with rates as low as two percent for anyone who can come up with a 15 percent deposit. Two year fixed rates are available at 1.9 percent with only a ten percent deposit needed.

Yet in the super-competitive market, it is important to look deeper and not simply choose the lowest interest rate. Factors such as cashback on completion, arrangement fees and free valuations can mean that a 2.1 percent mortgage actually works out cheaper than a 2.0 percent deal in the long run. Weigh up the options and speak to a professional to be certain you are getting the best deal.

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