Ulster Bank has boosted homebuyers

DESPITE the imposition of the six-week lockdown, there is good news for Northern Ireland’s first-time homeowners. Ulster Bank, one of our Big Five High Street lenders, has announced the first 90% mortgages since the start of the pandemic.

It hopes that its three and five-year deals will open up the property market, especially to first-time buyers. These could be available early in the New Year.

This will put pressure on the rest of the Big Five — Danske Bank, Bank of Ireland, AIB and the Progressive Building Society to follow suit.

The Ulster Bank’s announcement comes as the property market displays more buoyancy than expected.

The latest Government Property Price Index shows that the average house price here has grown by 2.4% to £143,205 in the past year, although the growth rate was still the weakest in the UK.

Unfortunately, home ownership was one of the many casualties of Covid-19.

Lenders worried by the potential impact of coronavirus on the housing market withdrew 90% mortgages until the financial damaged could be assessed. Subsequently, deposits of 15%20% became standard.

Ironically, the effect of the pandemic on foreign travel and domestic socialising has meant that people who are trying to get a foot on the property ladder had more disposal income for a deposit.

Banks and building societies say that lending is based on the borrower’s ability to repay the loan across the life of the mortgage.

However, the 20% or 15% mortgages were a strong disincentive to renters seeking to own their homes.

This will impact the housebuilding market, though apparently the Ulster Bank’s 90% deals are not available for new builds.

In the meantime that fine local institution Co-ownership has helped since 1978 over 29,000 people to buy their first homes, and significantly it currently has more than 9,000 contented co-owners.