When James and Allison first started renting together, they were determined it would be a temporary move. Fresh out of university, they turned their attention immediately to homeownership, putting away as much of their money as their rent and living costs would allow. Allison had always been careful with my money and imagined with both of them saving they would be able to get a foot on the property ladder sooner rather than later.
Along came COVID
Fast forward six years with a budget of £250,000 and a carefully scrimped and saved £25,000 deposit and the couple finally started house hunting. Then along came 2020. A global pandemic, the closure of the property market, a failing economy and widespread job losses. James, a hotel manager, was placed on furlough. Allison was fortunately able to work from home. With government support and the hope that the situation would be temporary, the couple remained optimistic. Mortgage lenders took a more cautious approach, however. In the months that followed, news that lenders were pulling hundreds of mortgage products for buyers with 5% and 10% deposits was widely reported in the media.
The struggle to find a mortgage
Just before lockdown hit, James and Allison had managed to secure a mortgage in principle with a 10% deposit. Now, like many others, they faced being denied a mortgage despite having an agreement in principle. Through no fault of their own, they found themselves thousands short on their deposit.
Difficult, but not impossible
Reporting shows first-time buyers are set to lose their ‘share-of-sales stronghold’ by the end of the year, James and Allison are far from alone in their experiences. And, while 56% of first-time buyers under the age of 35 have received financial assistance from the Bank of Mum and Dad, not everyone is in the same position.
Getting a mortgage may still be possible for the many despite the difficulties in the market. That’s where we come in. We can help people like James and Allison to get a grip on their finances and find a mortgage that suits their circumstances. We’re here to consider all the options available to you.
Boris Johnson recently announced his intention to develop plans to allow more low deposit mortgages to be made available. Ministers are scoping plans to allow more mortgages to be offered with a 5% deposit. We will keep you up to date with developments.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.