Its funny how Sunday will often bring the most telling news stories to bear when sitting at the dinner table on what is usually an otherwise uneventful day.
Yesterday was just one such Sunday for, when flicking through yesterday’s Observer, I came upon an article by one Lisa Bachelor entitled ‘Nationwide woos first-time buyers with 90% loan-to-value mortgage’ that is now available for those that may have missed it at http://www.guardian.co.uk/money/2009/nov/01/90-per-cent-mortgage-nationwide.
I have to admit I was somewhat surprised at this turn of events in view of the problems that have arisen in and around the global financial crisis and its impact upon the mortgage market in this country with the collapse of Northern Rock and its eventual government takeover as a result of the speculatory activities of banks and other financial institutions.
Now, however, Nationwide has launched mortgages that only need a 10% deposit with fixed rates starting at 5.98% for two years with a £495 fee which is quite a turnaround from the fact recent research by Moneyfacts.com had shown a 75% fall in the number of loans that are available to potential customers in the past year to those with only enough for a 10% deposit.
Therefore, on the face of it, Nationwide’s move seems to signal a marked turnaround.
However, the reality is somewhat different in view of the fact that Nationwide would only offer these deals to those with its ‘Flexaccount’ where customers pay at least £750 a month into their account. Moreover, a little over two years after its virtual collapse, Northern Rock has made an aggressive re-entrance into the mortgage best-buy tables having reduced interest rates on its home loans three times so that it now offers a market-leading two-year fixed rate at 3.65% for people buying a home.
As a result, there seems to be some significant scope for advancement of the economic recovery in this country impacting upon customers ability to take out mortgages at cheaper and more consumer friendly rates. However, I feel that we are still some way away from the approach of financial institutions prior to the global financial collapse and the resulting impact of the recession that followed.
In related news about the house before I forget! After hours of scouring webpages, looking through endless home information packs, and talking to so many estate agents on the phone everyone has agreed. Move in date is the first of next month, and I am going to need deposits on tuesday from everyone who is moving in. And before you ask Matthew, no you can’t borrow money…