Government backed local housing schemes were discussed in the financial press this weekend, following news that Key workers and First Time Buyers are struggling to obtain the finance needed to take advantage of the incentives on offer. Both the Times and the Independent on Sunday looked at the various schemes available, such as NewBuild Homebuy and Rent to Homebuy, but experts said that only a specific range of more expensive mortgage products are offered, and lenders will often not accept incentives such as ‘rent-back’ as a deposit, forcing borrowers to stump up extra funds. The Sunday Mirror revealed that thousands of homeowners are taking advantage of low interest rates and choosing a tracker mortgage, but warned that anyone considering this type of deal needs to be prepared for future rate rises and factor this into their monthly budget. The Sunday Times debated whether a fixed or a tracker rate was the best way to go, while the Financial Times predicted the return of long term mortgage deals following a recent improvement underlying borrowing costs. Despite this drop, and the base rate being held for the sixth consecutive month however, the Guardian and Sunday Times reported that some lenders have actually increased their rates in recent weeks. Elsewhere, the Observer discussed worrying figures from the FSA showing that 38% of homeowners with interest only mortgages are now in negative equity and many have no repayment vehicle in place. Experts recommended that borrowers consider switching to repayment while rates are low, overpaying on the mortgage or setting up a long term saving vehicle. In savings news the focus lay mainly with the increase in Isa allowance for the over 50s taking effect from October 6th, and urged savers to take advantage if they can. Many will be unable to add to existing fixed rate Isas, so the advice here was to approach the existing provider and request a penalty free transfer.
What the papers say- 12th - 13th September 2009