With the banks reducing the number of low deposit mortgages available, many Wigan first-time buyers cannot afford to buy and have had to remain in rented accommodation.
This has caused rents to rise...
Wigan rents rise from £531 to the current £558 per month
over the last 12 months, an increase of 5.0%.
According to the Land Registry, Wigan property values currently stand 4.9% higher than a year ago, this is split down as follows:
• Detached Wigan homes 5.2% higher
• Semi-detached Wigan homes 5.8% higher
• Townhouse / terraced Wigan homes 4.2% higher
• Wigan apartments / flats 1.2% higher
These figures do not take into account the prices paid by Wigan buyers this summer, which we estimate to be even higher.
This will only filter through in the figures released in the spring.
So, why are the banks curtailing the number of low deposit mortgages.
The reason is they are fearful of a house price crash in 2021, although I think this is less likely to happen for reasons I have written about before.
This can quite clearly be seen in the pricing and availability of low deposit mortgages. As the Bank of England has reduced its base rate to 0.1%, in the last 12 months 10% deposit mortgages rates have actually increased from 2% to 2.8%.
Also, when lenders have been offering 10% mortgages throughout the summer, borrowers have had only a 24-hour window to commit before the lender withdraws the mortgage product from the market because of over subscription.
However, there are early signs that the 10% deposit mortgage market could gradually be returning to normal. We have recently heard some lenders are taking up to a week for their 10% deposit mortgage offers to run out.
Fingers crossed !
01942 233 999
sales@alanbatt.co.uk
