Government's 1% deposit scheme

Totally depends on which lenders offer it and what the criteria will be. It's just going to be useless posturing if lenders will make it impossible for a client to pass credit scoring for a 1% deposit or if there are endless hoops to jump through.

I have the feeling this is all bark and no bite

If the scheme is launched correctly and people are able to use it effectivly to buy property, then it would be madness as a mortgage adviser to not to get involved. However if there are a million unattainable barriers, such as with the Skipton 100% mortgage, then I might choose to focus my efforts elsewhere.

Despite the best efforts of lenders and other vested interests to convince us otherwise, house prices are still falling in my opinion. At best, they're stagnating. Given that, why in the world is the government seriously considering 1% deposit mortgages. It's a cynical ploy to win the votes of people not old enough to remember the devastating consequences of negative equity.

Another sticking plaster 'solution' that doesn't address the fundamental problem, house prices are far too high in relation to people's income.

There should always be encouragement for schemes which can help first time buyers onto the property ladder, and this would support buyers who have maybe been paying high rents for many years but unable to save a deposit on top.

There are some negatives though, not least around house prices. If prices were to drop, it could leave buyers on this scheme in negative equity. It could also contribute to inflated house prices due to lack of available housing already, let alone introducing a product which could see thousands more buyers able to buy for the first time.

The latest government meddling in the UK property and mortgage market isn't well received by financial advisers who have grown their teeth in industry. Lenders operating already in the higher loan amount arena are already doing a good job and there is more to follow right up to 100% soon it seems. 99% mortgages are great to assist first-time buyers but without the very much needed drastic increase in "affordable homes" how is this going to make affordability not a concern, it's a little like the Help to Buy scheme an attempt to paper over the cracks. The devil is in the detail of this latest scheme and we await a chance to properly scrutinise the full details before committing ourselves to a real opinion, as long as it doesn't involve filling the pockets of the large Plc building groups again it could have legs.

Whilst any ideas or schemes to keep the first run or the housing market active, as feeds all other stages within the housing economy, I sadly see this is nothing more than a vote winning carrot dangled to try win a younger demographic.

The sticking plaster solution of allowing 1% mortgages would certainly help those looking to buy where house prices are high but in reality for most clients in the Mid to Northern England and Scotland areas average house prices are much more realistic and affordable. Deposit raising for them isn't the issue, it's the disparity between wage growth and house price growth meaning affordability becomes the hurdle.

The real solution to helping the economy and the housing market is for the government to actually deliver on their plan of building more affordable homes, not a vote enticing gimmick.

In response to the potential consideration of a 1% deposit scheme by the UK government ahead of the upcoming general election, I hold reservations about its viability. Introducing such a scheme could substantially inflate the housing market, leading to heightened demand and subsequently, increased house prices. However, this could pose significant risks, particularly for individuals opting for mortgages with only a 1% deposit. In the event of a future decline in house prices, there's a genuine concern about these homeowners being trapped in negative equity, potentially becoming mortgage prisoners.

Moreover, there's uncertainty surrounding the enthusiasm of lenders to participate in this scheme, given the inherent risks involved. Overall, while the idea may seem appealing on the surface, careful consideration of its potential repercussions is crucial before its implementation.

In response to the Conservative government's proposal of offering 1% deposit mortgages.

Entering the 99% mortgage market seems like a distant dream for many, given the stringent affordability requirements set by lenders. Prospective homeowners would need to jump through numerous financial hoops to even be considered eligible. Moreover, the stipulation that the property must not be downvalued after the fixed mortgage period adds another layer of uncertainty, potentially leaving borrowers in a state of negative equity.

Considering these caveats, the prospect of accessing a 99% mortgage appears increasingly elusive for the average individual. The allure of a minimal deposit diminishes in the face of such convoluted terms and conditions, prompting one to question the practicality and feasibility of this proposed scheme.

The 1% deposit mortgage will sound great to many borrowers, but due to the mechanisms put in place to protect the market after the financial crash, there are various issues behind the scenes that need to be addressed if it's going to work. The main on is capital usage; lenders are required by the regulators to hold more capital per mortgage pound issued on higher risk loans, this means that lenders cannot do huge volumes on these types of applications and have to charge a considerable interest rate to make a return on the capital deployed. One solution would be to revisit the regulation, but then we risk creating the same "risk bubble" that brought down Northern Rock, so I cannot see that being an option. Another would be for the Treasury to underwrite part of the risk; however when they did this with 5% deposit mortgages the cost of the guarentee payable by the lender was seen as too high. So, it's sucess or failure will be down to the details of the backgorund mechanics depolyed

There has been a lot of talk, yet again, about the market crashing and it being a bad thing. This is much the same as we heard when 100% mortgages were launched months ago. Did the market crash? No! and why? Because there were strict guidelines around it meaning that a lot of people didnt qualify anyway OR they didn't fit the restrictions imposed on it such as clean credit history and extremely low affordability calculations. What I am basically saying is if they imposed a similar set of restrictions then it will fit a small number of people . . .I expect them to say longer term rate like they did with the 100% mortgage (5 year fixed rates) so so it mitigate against potential chance of negative equity. Is it a bad thing? Definately not!! The more options buyers have to get on the property ladder the better!!

Its almost a joke. What will 1% do for people? If this comes into force, its just going to be classed as the 0% mortgages. A big risk. We have no sway over what they decide, but lets see if someone in charge really thinks about this and considers the outcomes. I do fully understand how hard it is to save up a deposit though, please get valid advice on your mortgage options.