FTBs receive a boost as hundreds of new mortgage products launched

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by Kay Murchie

First-time buyers (FTBs) received a boost today after financial website, Moneyfacts, revealed mortgage availability is rising.

Since the onset of the credit crunch over two years ago, first-time buyers have been struggling to get a foot on the property ladder since without a hefty deposit, they have been unable to secure a mortgage.

However, research from Moneyfacts showed that 300 new mortgage deals have been introduced since the start of the year.

Moneyfacts said this has resulted in a 26% increase in the number of different products available for people with a 10% deposit.

Commenting on the figures, Darren Cook of Moneyfacts said: “Better rates and an increase in appetite to lend could indicate that lenders are opening their doors just a little wider and trying to compete for business.

“If standard variable rates continue to rise, many customers will be forced to find a better deal elsewhere and lenders may now be wise and gearing towards the prospect,” he added.

Meanwhile, in related news, research by Connells Survey and Valuation found that the end of the stamp duty holiday has not affected activity within the housing market.

In September 2008, the Government opted to increase the stamp duty threshold from £125,000 to £175,000 in a bid to revive the housing market, which was suffering at the time from plummeting house prices and the lack of mortgage availability.

Consequently, properties under £175,000 were exempt from the tax but this ended on 31 December 2009.

Many housing economists expected the housing market to suffer as a result but according to Connells Survey and Valuation, activity is strong in the housing market with the number of valuations on residential property carried out in January 9% higher compared with a year earlier.

Ross Bowen, the managing director of Connells Survey and Valuation comments: “December and January are traditionally quiet months for the housing market, but valuation activity in December was buoyed by transactions completed by before the withdrawal of the higher stamp-duty threshold.

“This more positive trend was continued in January, with valuations up a tenth on a year ago. The positive start with transaction levels in January points to a continuing improvement in the housing market,” he added.

The figures come just a few days after leading economic forecaster, the Centre for Economics and Business Research, said it expects house prices to rise more than 6% during 2010 and be around 20% higher by the end of 2013.