The Nationwide building society has decided that what young people need right now is a bit of additional hope for the future torn away from them, as it’s increased the deposit required for new buyers wishing to get themselves into the world of mortgages and home ownership.
Nationwide used to offer a 95 per cent mortgage that was ideal for first-time buyers, meaning they only needed to find a modest five per cent deposit themselves. That generous promotion is now in the bin, with the building society ratcheting the maximum mortgage level down to 85 per cent of the value of a home; leaving younger people trying to buy their already unaffordable first house now having to find a deposit three times the size.
The lender is blaming “unprecedented times and an uncertain mortgage market” for the change, meaning it’s worried house prices may fall in the wake of coronavirus job losses and doesn’t want people taking on too much risk with mortgages at the very limit of their affordability. A spokesperson for the chain said: “Our priority at this time must be to help members keep their homes. As such, we need to ensure our members can afford their repayments, while doing what we can to protect them from falling into negative equity.” [BBC]