Yorkshire Building Society has expanded its innovative £5,000 Deposit Mortgage scheme to include flat purchases, opening new opportunities for first-time buyers across the UK.
Amid rising house prices and soaring interest rates on mortgage products, many prospective first-time homebuyers have struggled to get on the property ladder in recent years.
The building society’s scheme allows prospective homeowners to purchase properties worth up to £500,000 with just a £5,000 deposit with this expansion coming as a direct response to feedback from brokers and customers.
Would-be first-time buyers can access the mortgage product directly through Yorkshire Building Society or via the financial institution’s intermediary lending arm, Accord Mortgages.
Those interested are encouraged to speak with a mortgage broker to explore their options, however, the building society has confirmed that all other terms and conditions of the £5,000 Deposit Mortgage will remain unchanged.
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Yorkshire Building Society is expanding its mortgage deals for customers
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Ben Merritt, the director of mortgages for Yorkshire Building Society, argued why Britons looking to purchase their first home should consider taking advantage of the £5,000 Deposit Mortgage scheme.
He explained: “We’re absolutely delighted with the impact this product has had – our teams have been overwhelmed by the very human stories illustrating the difference it has made to people’s life plans.
“Expanding its reach to include flat purchases is the natural next step and we’re really pleased to be able to respond to feedback by offering this additional opportunity for would-be first-time buyers to benefit.”
The expansion of the building society’s initiative is expected to particularly benefit prospective first-time buyers looking to purchase properties in city centre locations across the UK.
Britons have struggled to get on the property ladder in recent years
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Analysis by the building society suggests the change will have a significant impact in London, the South-East and parts of Scotland, where property prices tend to be higher.
In these areas of the country, flats represent a popular choice for first-time buyers entering the property market with Yorkshire’s offering helping relieve the cost of borrowing.
According to the building society, hundreds of first-time buyers have already benefited from the scheme since it was introduced to the market in March 2024, and has received a positive response from customers and brokers.
The innovative product was developed after analysis showed that raising a typical 10 per cent deposit on the average first-time buyer home, worth £200,000, was the biggest obstacle to homeownership.
Research from Yorkshire Building Society’s Home Truths Report in 2023 revealed that 78 per cent of people in the UK feel homeownership is becoming an elite privilege.
Further research in 2024 showed that 59 per cent of first-time buyers risk abandoning homeownership aspirations due to financial commitments and high living costs.
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Based on Yorkshire Building Society’s analysis, Britons who are forced to rent for life could be £2.6million worse off compared to their counterparts who are able to make it onto the property ladder.
In recent years, the cost of borrowing has surged due to the Bank of England’s Monetary Policy Committee (MPC) raising the base rate in an attempt to rein in inflation.
With the consumer price index (CPI) falling closer to the central bank’s two per cent target, the MPC has voted to slash interest rates to 4.75 per cent with multiple rate cuts predicted to take place throughout 2025.
Analysts are betting on the Bank of England reducing the base rate by 25 basis points to 4.5 per cent tomorrow (February 6) at the next committee meeting.
