The time is now for first-time buyers

First-time Buyers

Unless you’ve been avoiding the news for the past 8 years, you’ll know that the UK’s property market pretty much crashed in 2008 at the start of the economic downturn, but since then it has been making a slow recovery. One of the biggest reasons for the upmarket in fortunes is interest rates, which have been extremely low for a number of years now and this has had a knock-on effect for mortgage rates, which means more people have benefited from lower monthly repayments on their mortgage(s).

New analysis from MoneySuperMarket has revealed that mortgage rates in June 2015 were at a three-year low and this has enticed hundreds of first-time buyers into buying a property. What’s more, the comparison website also revealed that first-time buyers are currently benefitting from a significant increase in the number of overall mortgage products available exclusively to them!

First-time buyers have never had it so good!

If you’re thinking about purchasing a property, now’s the time! The analysis revealed that the overall number of mortgage products available to first-time buyers is currently 2,776, significantly higher than the 1,324 recorded in April 2012; this is thanks, in part, to the UK Government’s Help-to-Buy scheme. Mortgage interest rates were also found to have dropped 1% in the last 3 years to 3.26%.

When it comes to deposits, first-time buyers traditionally pay 10% of a property’s value to secure their mortgage. However, the average loan-to-value (LTV) rate has remained fairly consistent since 2012, meaning these buyers would need to splash out a hefty deposit of around £31,500 on a property valued at £150,000. In comparison, first-time buyers who can only offer a deposit of 5% would only pay around £7,500 for the same property.

The number of 95% LTV mortgages available has rapidly increased in the past 3 years, up from 31 products to 170, a staggering increase of 448%; interest rates for 95% LTV mortgages have decreased by about 1.04% over the same period. This data means that buyers who place a 5% deposit can offer less money upfront and still benefit from cheaper monthly mortgage repayments.

Research is vital when choosing a mortgage

The above factors mean that the market is much more accommodating to those looking to get their foot on the property ladder. However, it’s still essential to do research when considering a mortgage. If you’re able to save enough for a 10%, or even a 15%, deposit, you’ll find that you’re able to negotiate better deals. If you’re struggling to save enough for a deposit, the government’s new Help-to-Buy ISA could help.

First-time buyers should also consider more than just interest rates when choosing a mortgage; expensive fees could nullify any benefit gained from a mortgage with a lower interest rate. Furthermore, while mortgage approvals have increased by 7% in May 2015 compared to March 2015, the lending criteria has not relaxed; first-time buyers will still need to have a strong credit score and be able to prove that they can afford the mortgage repayments. Buyers should also consider whether they want fixed or variable interest rates; with fixed term rates you’re likely to pay a little more but be free of any interest rate hikes that may occur, whereas, variable rates are likely to be slightly cheaper, but could be more expensive in the long run if, and when, interest rates rise.

Are you considering purchasing your first property in Cardiff? We can help find your perfect home in all areas of Cardiff, including Cardiff Bay, Llandaff, Pontprennau and more. Contact our team today on 02920 668585 or email

01 July 2015


Posts by date

Sign up for updates

By using this form, you agree with the storage and handling of your data in accordance with GDPR for the sole purpose of communication. We respect your privacy and will not share your data with third parties. For more information, please view our Privacy Policy.

cwtch tile