Santander has taken a bold step into offering a mortgage that allows first-time buyers to borrow an impressive 98% of the property's value. While this may seem like a game-changer for those struggling to find affordable housing, experts warn that the "very strict" rules surrounding this deal will exclude many potential borrowers.
For starters, the product is only available to first-time buyers, and flats are off-limits due to regulatory restrictions. Additionally, self-employed individuals won't be eligible, while joint mortgage applications can only take place if both parties meet the criteria as first-time buyers.
The maximum loan amount of £500,000 may also prove problematic in areas where property prices are sky-high, such as London. According to Halifax, the average house price in the city is around £539,000 – far beyond what this mortgage deal can accommodate for most buyers.
Despite these limitations, some experts see Santander's move as a step in the right direction. Trinity Financial broker Aaron Strutt believes that this product could tempt other major lenders to offer more generous mortgage deals with lower deposit requirements.
However, not everyone is optimistic about the potential benefits of this mortgage deal. Paula Higgins, chief executive of the HomeOwners Alliance, notes that while it may make a difference for some, the stringent rules will limit how widely this product can be adopted – particularly in areas where property prices are high and deposits may be needed to secure more affordable homes.
Ultimately, Santander's 98% mortgage deal highlights the ongoing challenge of making home ownership more accessible to first-time buyers. While it's a bold step forward for the bank, it remains to be seen whether this product will have a lasting impact on the UK housing market.
For starters, the product is only available to first-time buyers, and flats are off-limits due to regulatory restrictions. Additionally, self-employed individuals won't be eligible, while joint mortgage applications can only take place if both parties meet the criteria as first-time buyers.
The maximum loan amount of £500,000 may also prove problematic in areas where property prices are sky-high, such as London. According to Halifax, the average house price in the city is around £539,000 – far beyond what this mortgage deal can accommodate for most buyers.
Despite these limitations, some experts see Santander's move as a step in the right direction. Trinity Financial broker Aaron Strutt believes that this product could tempt other major lenders to offer more generous mortgage deals with lower deposit requirements.
However, not everyone is optimistic about the potential benefits of this mortgage deal. Paula Higgins, chief executive of the HomeOwners Alliance, notes that while it may make a difference for some, the stringent rules will limit how widely this product can be adopted – particularly in areas where property prices are high and deposits may be needed to secure more affordable homes.
Ultimately, Santander's 98% mortgage deal highlights the ongoing challenge of making home ownership more accessible to first-time buyers. While it's a bold step forward for the bank, it remains to be seen whether this product will have a lasting impact on the UK housing market.
but at the same time i get where the experts are coming from - all these super strict rules are gonna limit who can even qualify for it 
and lets be real, £500k is basically unaffordable in london lol 
but i do love that santander is trying to mix things up and maybe tempt other lenders to offer more generous deals 
we need more innovation like this in the housing market ffs
. The fact that they're offering such a high loan amount is super generous 
.
. It's like, who can actually meet those criteria? Self-employed individuals won't be eligible, which is a total bummer for some people 
. And what about joint mortgage applications - it's gotta be both parties meeting the first-time buyer criteria? That's just not gonna fly for most couples 
.
but like the rules do seem super strict 
i mean who can actually meet those criteria? its all well and good for ppl with stable jobs and perfect credit scores lol. what about everyone else who needs a little more time or help getting their finances in order? 
maybe santander shld consider some kind of 'test run' or pilot program to see how it goes before making it available to the masses 
. On one hand, 98% of the property value is insane! You could buy a £500k house with just £2,000 down payment! 
But, like Paula Higgins said, the rules are super strict and won't work for most people... self-employed individuals, flats, etc. are out of luck 
.
. This mortgage deal might not help that many people. Plus, as you said, £500k max loan amount is a big constraint for high-end areas like London 
: it's been steadily increasing by around 10% annually 
. This mortgage deal might not be enough to stop that trend. What do you guys think? Should we be celebrating this or are there more steps needed to make home ownership accessible? 