Every Friday, we take an overview of the mortgage market with industry experts and round up the best rates with Moneyfactscompare.co.uk.
There was some positive news for first-time buyers this week with data showing the number of low-deposit mortgages had reached a 17-year-high.
There were 442 mortgage deals available for buyers who can put down a 5% deposit on a home, according to Moneyfacts.
For buyers with a 10% deposit, it counted 845 available deals.
It means that both are at the highest point since the 2008 financial crisis, when banks were forced to tighten their lending rules.
Lenders have been under pressure to better cater for people trying to get on the housing ladder, and many have been rolling out low-deposit deals in a bid to stimulate activity in the housing market.
On Wednesday, Santander lowered first-time buyer rates by up to 0.21%.
Rachel Springall, finance expert at Moneyfacts, said: “The flourishing choice of low deposit mortgages will no doubt be welcomed by borrowers who are either looking to remortgage or are a first time buyer.
“The government has been clear that it wants lenders to do more to boost UK growth, and so a rise in product availability for aspiring homeowners is a healthy step in the right direction.
“However, there is still much more room for improvement, particularly as the choice of deals at 95% loan-to-value represents just 6% of all deals available to borrowers across fixed and variable mortgages.”
Here are the top first-time buyer deals on the market…
Moneyfacts also rounds up what it calls “best buys”, which look beyond the lowest rates and take in incentives and fees…
Overall, fixed rate mortgage reductions outweighed rises this week.
With inflation coming in lower than expected, analyst predictions for base rate cuts by the Bank of England this year rose from three to four, giving lenders more encouragement to make reductions.
HSBC reduced rates by up 0.24%, The Mortgage Works by as much as 0.25% and NatWest and RBS made cuts of up to 0.13%, resulting in more deals priced below 4%.
“Borrowers are the winners here as the market becomes more competitive, giving them more options and encouraging more people to jump into the market rather than sitting on the fence, trying to time the market,” said Pete Mugleston, managing director at Online Mortgage Advisor.
What’s going on in the housing market?
Official figures released by the Office for National Statistics showed house prices jumped by 5.4% in the year to February – the fastest rate in more than two years.
House price growth has been accelerating since last summer, and activity has picked up this year as buyers rushed to beat stamp duty increases.
From April, first-time buyers in England and Northern Ireland started paying stamp duty on properties costing more than £300,000. They were previously exempt from paying the tax on properties up to £425,000.
“Official house prices will be boosted for at least another two months by the flurry of activity ahead of the stamp duty changes,” Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, said.
“But there is genuine strength in the housing market.”
We also got data from Rightmove showing asking prices rose by more than £5,000 to an average of £377,182 in April, despite less generous stamp duty discounts taking effect.
Rightmove property expert Colleen Babcock suggested people putting their homes on the market should be careful considering the number of homes for sale is at a decade high.