First-time home buyers are having to look for help to grasp their dream of homeownership. A recent report stated the average length of time to save for a deposit is ten years. Inflation has made it even harder to save money for a deposit. In addition, borrowing is expensive and house prices are high, especially for first-time home buyers. It is not easy to buy a home today and it only looks to get more difficult.

Hopeful home buyers are expected to be presented with a scheme that could make all the difference in bringing affordable property purchasing into reach. In the spring budget, Chancellor Jeremy Hunt, will present a 99% mortgage scheme for new builds. This would reduce the amount of a deposit required for a property to only 1% of the purchase price. The purpose of the scheme is to assist people onto the property ladder as well as help bring more housing into the market.

Homeowners seeking remortgages are helping to push up the activity in the mortgage lending market. This could be surprising due to the fact that there had been more opportunities to find lower rates in mortgage lending than in remortgages. While it is expected that homeowners would be avoiding their lender’s standard variable rate (SVR) in favor of a lower interest rate remortgage, with mortgage offers for home buyers under the standard base interest rate it would be expected that there would be a mortgage lending boom. The issue might have been that the lowest interest rate offers were reserved for home buyers able to qualify with large deposits, and credit histories with few flaws, if any.

There are growing calls for the Bank of England’s Monetary Policy Committee (MPC) to cut the standard base rate. The current rate is 5.25% and has held steady for the last four consecutive meetings. The next meeting, in only a few weeks, is forecasted to follow the trend as inflation has remained at 4.0% for the last few months after rising from 3.9% in November. If anything, due to inflation remaining stubborn, some experts could be expecting a slight increase. Such a vote would likely kick inflation back onto the downward path it had followed last year.

A warning has been offered by one large mortgage lender of rising interest rates, and experts believe it is the opening of a gate in which many others will follow. Santander has given notice they are going to increase their interest rate offerings across several mortgage products on Wednesday. They are not the first to do so, but others have done so more quietly without warning. The broad announcement should put borrowers on alert, and it will come as no surprise as it was considered the lending market would pull back from its deeply competitive mode and take footing in a less risky lending market.

In February 2022, the Bank of England’s Monetary Policy Committee (MPC) in their first meeting of the year, increased the standard base interest rate to 0.50%. It was the second increase in what would end up being fourteen consecutive MPC meetings that resulted in a rate hike. Throughout 2021, until the December MPC meeting of that year, the rate had been at an historic all-time low due to the pandemic before it increased from almost zero at 0.1% to 0.25%. Despite the increases that had come, borrowing was still cheap and with the warning of more rate hikes on the way, there was strong motivation for hopeful home buyers to purchase and obtain a low mortgage rate before they would likely be higher.