by Mark Johnston
Lloyds New Pledge to Help First Time Time Buyers.
In recent weeks mortgage providers have released new products on to the market and they have also slashed rates for those with smaller deposits.
It therefore seems then that first time buyers are now been given a much needed boost. Especially as recently one of Britain’s biggest mortgage lenders, Lloyds banking group, has pledged to lend first time buyers £6.5 billion by the end of 2013 in order to help them get on to the property ladder.
This figure is £1.5 billion higher than the lender said it would lend last year to help 50,000 people in to their first homes. The banking group committed to lend £5 billion to help first time buyers by the end of the year in July 2012.
This particular pledge comes after the latest figures from the Council of Mortgage Lenders (CML) showed that first time buyer numbers were up by almost a quarter year on year.
This extra money pledged by Lloyds banking group will be delivered through a range of initiatives and products, including their ‘lend a hand’ scheme.
The ‘lend a hand’ scheme was originally launched in May 2009 and the scheme enables first time buyers to put down a 5 per cent cash deposit, while a family member puts 20 per cent of the house value in to a savings account with the bank.
The mortgage rate for this scheme is 4.4 per cent while the savings account has a fixed rate of 2.7 per cent, which does beat many current best buy savings accounts.
Stephen Noakes, mortgage director at Lloyds banking group, said “while the property market is likely to continue to be challenging, we remain committed to getting things right at the start of the chain. Our range of products is continuing to make home ownership a reality for so many first time buyers”.
Spokeswoman for moneyfact.co.uk, a leading comparison website, Charlotte Nelson, suggested that “this commitment should provide some welcome relief for those trying to get on to the first rung of the property ladder”.
Johnathan Harris of mortgage broker Anderson Harris added “the fact that Lloyds are now offering a wide range of 90 per cent deals is excellent news and should therefore mean that many more first time buyers can finally make their dreams reality”.
However, some industry experts feel that this pledge is ‘all talk’ as the lender has neither increased the number of mortgage deals available to those with small deposits, nor have they reduced the rates on the mortgages that are currently available to first time buyers.
In light of this fact only time and the banks end of year figures will reveal whether this pledge will actually come to fruition.
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