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100% mortgages double in a year

According to a recent report the number of 100% mortgages that are available in the UK has doubled in the space of a year in order to enable consumers with no deposit to get onto the property ladder.

With these mortgages the buyer does not have to put down a deposit, and this type of mortgage has become particularly popular amongst first time buyers that do not have equity from a previous property and are unable to raise the hefty deposit required for a standard mortgage.

The steep rise in property prices in the UK over the past few years has made it more and more difficult for house buyers – in particular younger first time buyers with no equity and little in the way of savings – to raise any sort of deposit, and without the availability of no deposit mortgages many of those fitting into this category would be left out in the cold in terms of getting onto the property ladder. However, the availability of these mortgages means that even without a deposit buyers can get a mortgage.

The finding from a survey carried out by MoneyExpert indicated that there had been a rise of around 112 percent in the number of 100 percent mortgages in the past year.

According to the figures the number of no deposit mortgages has risen from 60 in May of 2006 to 127 in May of 2007. Officials from MoneyExpert state that lenders are having to find new ways to allow more people to get into the property market because of the extortionate cost of properties.

A spokesman for MoneyExpert said: "Affordability is the buzz word at the moment as lenders look to find new ways to bring first-time buyers into the property market. Offering 100 per cent mortgages is another example of this, as saving for a deposit on even the average property can take years."

Tom Smith
29th June 2007


More Information:

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