Everything first-time buyers need to know about purchasing property during a pandemic

by Derin Clark

For many would-be homeowners, getting onto the housing ladder is tough during normal circumstances, but with the financial fallout from the coronavirus pandemic continuing to be felt, those looking to buy their first home are facing an even more challenging mortgage market.

In fact, research carried out by Moneyfacts.co.uk, shows that on the 29 July 2020, there were just 1,363 mortgage deals available to first-time buyers, which is down from the 2,681 that were available on the 1 March 2020, before the UK began to feel the financial effects of the pandemic.

Why are there fewer mortgage deals?

At the end of March and during April, many mortgage providers began withdrawing their high loan-to-value (LTV) mortgage deals, particularly hitting the 90% and 95% LTV mortgage market. This meant that the numbers of mortgage deals for those with a 10% or 5% deposit were significantly cut.

This not only impacted the choice available to first-time buyers, but also meant that it was harder for first-time buyers to get a competitive mortgage rate compared to the beginning of 2020.

During July, mortgage providers did start reintroducing their 90% LTV mortgage deals into the charts. For example, on Monday 20 July 2020, Nationwide (one of the largest mortgage lenders in the UK) extended its mortgage product range to once again include 90% LTV deals.

Despite some influential mortgage providers re-entering the high LTV market, the number of deals available to first-time buyers remain significantly lower compared to the number available before the coronavirus pandemic.