UK lenders offer more products for first time buyers

Lenders in the UK are continuing to woo first time buyers with new offer and products with the latest deals coming from the Chelsea Building Society and the Co-operative Bank.

Chelsea’s new first time buyer mortgage offers offset at no additional cost to the mortgage, helping customers make the most of their savings. Additionally, customers also get 1% of the value of the loan as cash back, helping them towards the costs of stamp duty, or any of the other costs involved in buying their new home.

‘Prior to launch we carried out research with both current and potential first time buyers. One of the findings that stood out was that current first time buyers value offset and that three in four potential first time buyers intend to continue saving post purchase,’ said Sunjeev Sahota, Chelsea Building Society product manager.

‘This is something we want to encourage, and is why the offset functionality in our first time buyer range comes with no additional cost, something which is unique in the market, added Sahota.

First time buyers also said that the upfront cost they wanted most help with was stamp duty so the lender has introduced a 1% cash back feature. ‘It is up to customers how they use the cash back, but with stamp duty at 1% for residential properties valued between £125,000 and £250,000, this will be a big help for a lot of first time buyers,’ explained Sahota.

A range of two year products include 2.99%, 75% LTV, with a £1,495 fee; 3.19%, 75% LTV, with a £495 fee; 4.24%, 85% LTV, with a £495 fee; and 4.49%, 90% LTV, with a £1,495 fee.

‘We have listened to first time buyers, and we recognise that each individual case is unique, but this new mortgage range with offset, cash back, competitive rates and exceptional customer service highlights our focus and determination to offer excellent mortgages and to continue helping first time buyers step onto the property ladder,’ added Sahota.

Meanwhile the Co-op had announced new best buy rates available across its mortgage range and first time buyer support extended to those buying with friends.

From today (Friday 23 November) customers will be able to organise their finances for 2013 by locking into the bank’s market leading rates which now include a five year fix at 2.79% for 60% LTV. In addition, the Co-operative Bank has launched a wider range of reduced rates specifically suitable for first time buyers borrowing at 90% and 85% LTV.
 
Following high levels of demand for the bank’s new 90% LTV two year fixed rate mortgage at 3.99%, the Co-op has now extended this rate to its Share to Buy mortgage. This enables borrowers to get on the property ladder by taking out a mortgage jointly with friends, a partner or relatives.

As part of its pledge to increase mortgage availability and to support the first time buyer market, the bank has committed to holding these rates until the end of the year. In addition, from January 2013, members holding a mortgage with the Co-op will also have the opportunity to benefit from the bank’s re-launched membership scheme.

‘With the Christmas rush upon us and a new year fast approaching it’s a good time to review your finances and to look at ways to cut down on outgoings in 2013. We’re determined to give customers a helping hand and at a time when the average mortgage arrangement fee is over £1400, we’re offering fee free mortgages across all LTV’s, in addition to a wide range of market leading rates,’ said James Hillon, head of mortgages at The Co-operative Bank.

‘We’re also increasing our support for first time buyers through the Funding for Lending Scheme by extending our market leading 90% LTV mortgage to those buying with friends via Share to Buy. In addition, customers who are able to find a 15% deposit will now also benefit from reduced rates,’ he added.