First-time buyers and manovers who save for a deposit or seek the best deal can take advantage of two new technology tools to reach the mortgage market.
Barclays added a first domestic savings tool to its application to help borrowers achieve their deposit targets.
Users can create a “first home” savings target in their Barclays app and set up a regular transfer to an existing savings account.
They will receive regular updates on their progress, advice on goal setting through the Residential Savings Calculator, and access to mortgage mentors and advisers who can give them practical tips on how to save.
The second tool is the result of the partnership between Mojo Mortgages and the fintech Snoop app, an economy and budget tool that uses open bank technology.
The app can detect whether users are overpaying on their bills and help them get better deals on energy and mobile rates, for example. It can also point users to better deals on their food purchases to help them increase their savings pot.
And in partnership with Mojo, the app will show users the best time to remortgage and provide first-time buyers with the best mortgage deals in their news feed.
Richard Hayes, chief executive and co-founder of Mojo Mortgages, said: “There is no doubt that times are tough now, with some lenders limiting high loans for value mortgages, but this partnership helps to combat that.
“Not only does it make you more aware of your financial situation, but it crucially shows you the options that are still available to you – options that many people may be totally unaware of. In addition, you have access to free expert advice at the click of a few buttons. “
‘Reversal of fortunes’
First-time buyers showed little love for banks in 2020, when equity-rich borrowers benefited from most of the mortgage business and low rates.
At the beginning of the pandemic, lenders withdrew from high-value loans to value loans, primarily because of blocking restrictions and challenges posed by working at home.
The next blow to high LTV loans came when the housing market reopened in May and the government decided to raise the zero rate stamp tax limit to £ 500,000 in England.
Creditors were overwhelmed with applications and forced to shorten their intervals to handle capacity. This saw business for borrowers with a deposit of 10 percent or less almost disappear.
Analysis by Reallymoving found that the buyer market for the first time contracted 12 percent between July and December, compared to the previous year.
However, by the end of 2020, banks and construction companies started to return 90 percent of loans.
Earlier this week, Moneyfacts reported the number of products available at 90 percent LTV had peaked in six months.
The really moving chief executive, Rob Houghton, believes first-time buyers may experience a “reversal of luck” in 2021.
He said there are reasons for new buyers to be optimistic about the return of creditors to the market, a likely slowdown in competition for households when the stamp duty holiday ends and home prices potentially readjusting downward.
Samantha Partington is a freelance business and consumer journalist who writes about personal property and finance. Previously, she worked for Daily Mail and Property Week. She is the former adjunct editor at Mortgage Solutions and editor at Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and, later, as a mortgage lender, interim and secured loans. Samantha is qualified by CeMAP. Follow her on Twitter @ SamJPartington1.