One Per Cent Mortgages
Posted on 22nd February 2024
1% Mortgages, the impact on first time buyers, and how our Conveyancing Solicitors in Preston think the change will impact our clients
According to recent figures, the number of first-time buyers in 2023 was 100,000 less than in 2022, with the average age of the first-time buyer increasing to 34 years old. With those statistics in mind, consider this: you are a potential buyer who can easily get a mortgage, however, with the cost of living increasing, you are struggling to save your deposit. With average house prices in Lancashire being £213,263 for a semi-detached property and £374,045 for a detached property, you would need a deposit of between £21,326 and £37,404 just to take your first step on the property ladder. This can be a massive amount for two people to save, let alone a sole buyer, who is trying to save the money alone.
So, how will the new 1% mortgages impact first-time buyers, and, importantly, our Conveyancing Solicitors in Preston’s clients at MG Legal. Onyeka Obidi, Conveyancing Solicitor at MG Legal, explains.
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UK Government Introduces 1% Mortgages in New Plans
According to reports, the UK Government is considering a “radical approach” to “towering barriers to homeownership” by offering a 1 per cent mortgage, according to the Mortgage Uni mortgage exert, Peter Stamford.
Now, the Government is not suggesting a mortgage of only 1% of the property value, but instead is suggesting introducing mortgages whereby the homeowner only needs to find a 1 per cent deposit, making the process of saving that much quicker and more realistic for many home buyers.
It is anticipated that, if introduced, we can expect plans to be unveiled as part of the Government’s Spring budget.
Are 1 per cent mortgages a good idea?
Well, that remains to be seen, and our Conveyancing Solicitors in Preston would always refer clients to a specialist mortgage broker or financial advisor, to assess the suitability of such a loan before a person commits to his. However, some matters our Conveyancing Solicitors would point out are:
Such plans could lead to an increase of interest rates, affecting the long-term affordability of such mortgages.
There is a higher risk, if property prices fall, that people will end up in negative equity, whereby their mortgage loan amount exceeds the sale value of their house, due to the fact that there is much less cash put down towards the purchase price.
Alternatively, the introduction of such mortgages could lead property prices to increase, as there will be more affordability for purchasing houses if the deposit required is less.
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Here at MG Legal, our team of friendly solicitors are fully-qualified and have over thirty years' experience in helping clients just like you.
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If you are looking to instruct our solicitors, we have offices in Garstang, Longridge, Lancaster and Lytham for your convenience.
Conveyancing Solicitors in Preston specialising in house purchases
Whether or not the 1% mortgages are introduced waits to be seen, and our Conveyancing Solicitors will definitely be keeping an eye on any news suggesting they have been made public. However, whether you are buying a house now, or intend to in the future, our team are here to assist with the legal process.
Every buyer needs to instruct their own Conveyancing Solicitor to act on their behalf, to ascertain the good legal title of the property being purchased. Our Conveyancing Solicitors in Preston can assist, all for a competitive fixed fee, which you can find here. Our team are Conveyancing Quality Scheme accredited, a real mark of excellence in the Conveyancing world, and have years’ of experience handling straight forward and complex residential and commercial conveyancing.
For your fixed fee quote, or to discuss your purchase with our Conveyancing Solicitors in Preston, email property@mglegal.co.uk or call 01772 783314.
Why choose MG Legal, Conveyancing Solicitors?
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Preston’s landscape is evolving rapidly, making it an exciting time for potential homeowners and investors. Whether you're drawn to the modern aesthetics of new builds or the charm of emerging neighbourhoods, Preston offers a diverse range of options. With MG Legal's unparalleled conveyancing services, your journey to owning a piece of this vibrant city is in expert hands.
Tagged as: Conveyancing, Solicitors in Preston
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