HOPEFUL homeowners can now bag a property with just 5 per cent of its cost as a deposit - here is what available in the North-East right now for a £5,000 deposit.
High street giants returned to ultra-low deposit mortgage lending yesterday, April 18, in a boost to borrowers who have found themselves “shut out” of the property market over the past year.
Halifax, Lloyds Bank, HSBC UK, Barclays and NatWest were among those launching 5 per cent deposit deals for first-time buyers and existing homeowners under the UK Government’s new mortgage guarantee scheme.
Santander will offer three new mortgages under the scheme on Tuesday. Virgin Money will follow next month.
Katie Brain, a banking expert at financial information business Defaqto said: “When the pandemic started, all the mortgage deals for first-time buyers and those with small deposits just disappeared.
“Many who had saved hard for a deposit found themselves unable to get finance and were effectively shut out from the property market.
“Although there have been a few products that been briefly available during the pandemic, this is the first time that we have seen mainstream lenders in the high LTV (loan-to-value) market in nearly a year.”
Borrowers will still need to pass affordability checks.
They will also need to check individual lenders’ policies to find out more about whether they could be eligible, with several lenders setting out exclusions for new-build homes on Monday.
Some lenders also specified that self-employed customers will be able to apply for their deals.
Aspiring homeowners may also want to compare what is on offer under the scheme with the low deposit deals that are available outside it.
The number of low deposit mortgages on the market shrank dramatically in the early days of the coronavirus pandemic, as lenders became much more cautious in the tough economy.
The new scheme will tackle this by helping borrowers to secure a mortgage with just a 5 per cent deposit to buy a house for up to £600,000.
It will work by enabling lenders to purchase a Government guarantee that would compensate them for a portion of their losses in the event of a repossession.
The guarantee will be valid for up to seven years after the mortgage is originated.
Costing £100,000 or under, here are houses in the North East that you can buy with a £5,000 deposit:
Deerness Heights, Brandon, Durham
This three-bed mid-terrace house in the village of Brandon, Durham, is on the market for offers in the region of £100,000. The property benefits from an enclosed garden to the rear and detached garage.
Hill View, Broompark, County Durham
This terraced three-bed with open plan living space and french doors is in the semi-rural and quiet location of Hill View, Broompark, and is on the market for £100,000.
Windsor Road, Seaham, County Durham
This semi-detached three-bed with a garden and long driveway has been reduced by £5,000, so is now on the market for £100,000.
Surbiton Road, Fairfield, Stockton
An end terrace house with an open plan living and dining room with a garage and two gardens, this two-bed is on the market for £100,000.
Dale Road, Shildon, County Durham
This two-bed semi-detached property comes with an additional garden room and attack room. While it is listed for £100,000, the description goes on to say the guide price is between £100,000 and £110,000. If the latter, the 5 per cent deposit would be £5,500.
Woodland View, West Rainton, Houghton Le Spring
This three-bed end terrace house has a spacious garden to the front and a paved garden, outbuilding and parking to the rear. It is on the market for £100,000.
Bowman Street, Darlington
This three-bed end-of-terrace property, which has had a replaced kitchen, is on the market for offers in the region of £100,000.
Brankin Road, Darlington
This Eastbourne property is semi-detached and has two bedrooms, an open plan kitchen and french doors leading to the rear garden. It is on the market for offers in the region of £99,950.
Pease Street, Darlington
This two-bed mid-terrace house has off-street parking and a 100-foot south facing rear garden. It is on the market for £99,950.
Ridgewood Close, Darlington
This two-bed semi-detached house has a driveway, garage and back garden. Both bedrooms are double and it is on the market for offers in the region of £97,950.