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Post-HIP party good news for first time buyers

Post-HIP party good news for first time buyers

Category: Mortgages

Updated: 21/06/2010
First Published: 21/06/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
A post-HIP party atmosphere in the property market has seen a flood of homes being put up for sale.

The suspension of Home Information Packs by the new Government has led to a 22% surge in people putting their property on the market, according to Rightmove.

However, with the Budget predicted to include an increase in capital gains tax, property investors have taken a step back.

As a consequence of the combination of a slowdown in the demand for properties and a sudden jump in the number for sale, house prices increased by just 0.3% in June, compared with 0.7% in May.

According to Miles Shipside, commercial director at the property website, the slackening in the pace of price rises is good news for those looking to take their first step on to the property ladder.

"There is a bit of a post-HIP party atmosphere, with estate agents glad to restock their shelves and new sellers willing to give moving a go with fewer cost commitments," he added.

"Estate agents will get more selective about what price they are willing to market at, and the commitment of sellers to doing what it takes to achieve a sale.

"Serious sellers in all but the most popular hotspots are going to have to reduce their asking prices unless buyer demand recovers after the World Cup.

"That's good news for mortgage-challenged first time buyers, though should affordability swing enough to bring them back to the market in normal volumes, one has to question whether the wholesale funds would be available to meet the increased mortgage demand."

Amongst the best two year fixed rate mortgages currently on offer are a deal from The Co-operative Bank at a rate of 2.95% for borrowers with a 25% deposit, and a deal from HSBC at 2.99%, requiring a 30% deposit.

For borrowers looking for a variable rate mortgage deal for term, a rate of 2.29% is available from first direct which requires a 35% deposit, while ING Direct offers a deal at 2.84% needing a 25% deposit.

Find the best mortgage rate - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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