First time buyers unlikely to benefit from HSBC increased lending
January 16, 2009
Earlier this month the High Street bank HSBC made an ambitious pledge to increase its lending by around 20 percent next year compared to this year, claiming that it aims to lend around £15 billion in mortgage loans.
However, industry experts have said that the lender is not a particularly big player in the mortgage market, having just a 4 percent share, and that despite its promise it is unlikely to benefit first time buyers, and is more focussed on helping those that have a large amount of equity to use in order to remortgage.
One industry expert said: “HSBC’s move, in theory, is welcome - but we wait to see how it will be applied in practice to ensure it isn’t just a PR stunt. The plus-75pc LTV arena is one where borrowers are struggling to remortgage and first-time buyers are facing difficulty in buying so it would make sense to allocate extra funding in this area.”
She added: “This move should be welcomed by first-time buyers and those remortgaging. However, as with other lenders, it is likely that HSBC will continue to focus on those borrowing 60 or 75pc of the property value, attracting them with the best rates of interest and widest choice of deals.”
Whilst the move has been welcomed by industry professionals, others agreed that only those with large deposits were likley to benefit.
Another industry expert said: “Until there is more competition in this part of the market, a large gap will remain between the rates charged for borrowing up to 75pc to 80pc of the property value and those wanting more. In the short term therefore it is unlikely to be much help to anyone without a deposit of at least 20pc.”
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