We can report today that Santander has become the latest major mortgage lender to join the Government's Help to Buy scheme. The Government's scheme to boost low deposit mortgage deals has been flying off the shelves with more than 7,000 reservations and 1,000 sales in just four months.
It has come at a time of merging confidence in the UK economy with house prices rising and cheap mortgage rates available.
It is the first instalment of Help to Buy with the second mortgage indemnity guarantee due to launch in January.
It allows borrowers to access a 75 per cent loan to value mortgage with a 20 per cent Government loan, which is interest-free for five year, so only a 5 per cent deposit is needed.
The scheme is only available on new build homes worth up to £600,000 and will run for three years helping 74,000 buyers with £3.5bn worth of mortgages
The Home Builders Federation says the scheme has started “like a train” and could even run out of funding because it is so popular. Santander follows major high streets names such as Nationwide, Barclays and a number of building societies by joining the scheme.
The Spanish bank is only offering the deals through mortgage brokers and not in its branches, recognising the complexity of the deal.
Mortgage brokers can advise on the intricacies of such a deal and help you decide whether it is the right choice for you.
The housing market is growing in dynamism with sustained house price growth, growing mortgage lending and low rates.
The sector has been boosted by Government interventions through Help to Buy and funding for lending, which offers cheap loans to banks which they must then pass on to businesses or home owners.
The second stage of Help to Buy will launch in January and the Government has began meeting with mortgage lenders and builders to thrash out the details.
Chancellor George Osborne has already signalled his intention to ban people from using it for second homes or buy-to-let deals after early criticism.
The Council of Mortgage Lenders says lenders will be involved in the new scheme if it is clear and straightforward to understand.
For mortgage borrowers this hive of activity has boosted the market with lower deposits starting to cut through to those looking for a home.
With the average deposit currently running at 20 per cent the Government is hoping its actions and an improving UK economy can move it upwards.
The gross domestic product figures are set to be published on Thursday with many economists predicting an uptick of 0.6 per cent on in Q2 2013.
The increase would reflect a strengthening recovery on the back of consumer spending and house prices. With rates low and schemes available for deposits the housing market is becoming more affordable