Could growth in 35-year mortgages, coupled with stamp duty cut unlock the door for more first time buyers?
- 24th November 2017
- Property Tips
As demand for longer mortgage terms grows and with mortgage approval rates high, the buyer market remains strong
We all know buying a house is a long-term commitment. But with working lives now lengthening, and prices rising, so it seems are mortgage terms. Whereas once 25 years was the maximum term on offer, now 35-year mortgage terms are becoming more common.
Even in London where average wages are higher than most other parts of the country, longer mortgage terms could help to ease affordability pressures, putting a wider choice of properties within reach especially with interest rates starting to rise.
Spreading payments over a longer period of time can help to cut monthly repayments to more manageable levels, helping first-time buying young professionals who move to the capital every year get a foothold on the property ladder.
And with the retirement age set to rise further, young professionals should have plenty of time ahead to repay their home loans, making such arrangements serviceable into the future.
This trend should help keep the buyer market ticking over in the face of concerns over the strength of the market, especially if interest rates rise. Nationwide today, though, the signs are positive: overall mortgage approvals are higher than they were last year, with over 66,000 applications getting the green light in September alone.
In addition, the recent announcement by the Chancellor in the Autumn Budget now provides a good opportunity for first time buyers to get on the property ladder. He announced that stamp duty has been abolished for first time buyer purchases of up to £300,000, and if the first time buyer is inside London they will not have to pay stamp duty on the first £300,000 of their purchase.
Stephen Ludlow, Chairman at ludlowthompson, comments: “With so many buyers actively looking, sellers need to make sure they are in the best possible position to seal a deal, using agents who have a dynamic approach to the market.”
“ludlowthompson’s innovative MyAccount system is a good example. By providing real-time feedback on viewings, the transparency this provides helps our clients stay ahead of the competition."
With so many buyers actively looking, sellers need to make sure they are in the best possible position to seal a deal, using agents who have a dynamic approach to the market
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