Mortgage hunters are scrambling to make the most of Help to Buy’s 95% mortgages, according to new findings from the Mortgage Advice Bureau.
The MAB research shows that 40% of UK adults are planning to buy their first home, move house or remortgage before the end of 2016 – when the Help to Buy scheme is due to finish.
More than one in ten (12%) are actively seeking a mortgage deal within the next 12 months, with many attracted by increasing options for buyers with low deposits.
Among those seeking a mortgage within the next year, half are looking to buy a first home (50%) while 35% plan to move house. The remaining 15% want to remortgage an existing home.
More than one in four active mortgage seekers (26%) can only afford a 5% deposit. Just one in five (20%) can put down a deposit of more than 20%, while the majority (61%) are looking for deals with a maximum deposit of 10%.
The typical income of mortgage seekers is £32,313 – marginally lower than the average income of first time buyers since 2009 (£33,485 – CML).
Tellingly, almost one in ten current home owners (9%) wish Help to Buy had existed when they bought their first home.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Buyers are voting with their feet and we are seeing great enthusiasm for low deposit mortgages.
“The type of 95% mortgages encouraged by Help to Buy are part of what’s needed in a healthy market to cater for the full range of buyer needs.
“Helping remove the need for hefty deposits is where government support has really come into its own. Some lenders have joined the official scheme while others are offering 95% mortgages on their own.
“Either way, the end result for home buyers is better access to mortgages they can realistically afford.”
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