HSBC has today announced it will make £500 million available to help home buyers who have a 10% deposit.
According to HSBC’s head of mortgages, Martijn van der Heijden, the property market slump appears to be over with house prices recovering.
This has led to strong demand, according to van der Heijden, and as a result the lender will allow people to borrow up to 90% of their property’s value.
He comments: “We committed £15 billion to mortgage lending in 2009 – double our 2007 lending – and £1 billion of this was made available exclusively to home buyers with deposits of just 10%.
“Demand has been very strong and we have reached this target, so we are now committing another £500 million to this vital segment of the market,” adds Mr van der Heijden.
This will no doubt be good news for first-time buyers, who are crucial to the recovery of the housing market. However, many been unable to get onto the property ladder without a hefty deposit.
Research shows that first-time buyers need an average deposit of 25% in order to secure a mortgage.
Earlier this month, HSBC launched a low rate mortgage deal at only 1.99% but said it was only available to borrowers with a 40% deposit.