Interest in home buying remains steady, despite a dip in the number of mortgage searches following the winding down of the stamp duty holiday in June.
This is according to analysis by MoneySuperMarket which saw the number of general mortgage searches on its website dip by 5.2% in the two weeks leading to the 30 June ‘holiday’ deadline and also in the fortnight following.
Yet the price comparison believes the revival of 95% loan-to-value deals, which have opened the door to the property market to more low deposit borrowers over the last six months, have kept the market buoyant.
In fact, during the same period first-time buyer searches experienced a small dip during this time of 1.2%.
Yet MoneySuperMarket thought these falls were not significant and therefore indicated the market was still steady.
Jo Thornhill, mortgages expert at MoneySuperMarket, said: “The stamp duty proved very popular with many homebuyers, so it’s only natural many feared its end could lead to a major dip in home buying interest.
“However, our research reveals that though there’s a been a slight fall in general and first-time buyer searches, interest in homebuying remains steady.
“A big factor in this is undoubtedly the new temporary stamp duty threshold of £250,000 which means that buyers who are able to complete their purchases before October can still make significant savings.
“Another major factor is the increasing availability in 95% loan to value mortgages. This is a positive trend which is making it easier for younger buyers to get on the housing ladder.”
Low deposit risks
Jo emphasised that while it was great news low deposit borrowers could get onto the housing ladder, the larger the deposit you put towards your home the better.
Indeed, 95% mortgages can come with risks, she explained. For example, if you buy a home with a 95% mortgage, house price uncertainty means that if you chose to sell it in the short term, you could end up in negative equity.
“If you can afford it, try to buy with as big a deposit as you can afford. It will bring your borrowing ratio down and could give you access to lower mortgage rates,” she advised.
