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News Round Up – Tuesday 26th May
May 26, 2009Article by Ray Withers
Hello all, I hope all of our readers in the UK enjoyed their bank holiday weekend. This week the papers have been covering first time buyers and in particular Lloyds Bank.
The Daily Telegraph leads with a story that two-thirds of first-time buyers say they have given up of EVER getting on to the property ladder. Now I am hoping that is just current market sentiment that is causing such a view and that once markets start to stabilise and normal lending resumes then this view will alter. Before the ‘credit crunch’ nobody could argue that house prices were affordable, a decade of cheap credit and lax banks had seen the majority of the population priced out of the market. The current correction has made the situation a lot rosier for many first time buyers, and there may still be more to come (although Property Frontiers believe we will now see prices start to stabilise), but we will have to wait and see.
The Independent also cover the same story.
So for the two-thirds of buyers who still feel that stepping onto the property ladder will never happen, they can take comfort in the fact that Lloyds TSB have just announced they will be offering 95% LTV mortgage for first time buyers. Lloyds are extending an olive branch with a new mortgage called ‘Lend a Hand’, but there is a slight catch – borrowers will require their parents to deposit a sum equal to an additional 20% of the property value in a savings account with the bank, whereby it will not become accessible until the outstanding loan falls below 90% of the property value. This is obviously great news for first time buyers, and it is the first time Lloyds have offered such a service in over 12 months.
Of more interest however, is the fact that one of Britain’s major banks has taken the steps to offer such a product. With many believing this is a sign of things to come, we may start to see many of our leading banks and building society’s offering increasingly competitive products again. If anybody would like to leave a comment on this story we would love to hear your thoughts on the matter, or perhaps you are a first time buyer considering this option.
Written by: Christopher Chadd