House price crash warning as new mortgage deal risks 'great danger'
A leading property expert warned of 'great danger'
PA
The return of no-deposit mortgages is a "great danger", according to a leading property expert.
Renters who lack savings or financial support from their family can potentially make the jump on to the housing ladder with a new zero-deposit mortgage released by Skipton Building Society.
But Jonathan Rolande, of House Buy Fast, has warned the new mortgage deal risk sparking a crash, as they did in 2008.
He told GB News: “It is a repeat of something that was offered in about 2008 when the property market crashed.
The product has been described as a rebrand of 100 per cent mortgages
PA"So it's actually not a new product. It's just something that's being rolled out once again. It was making up less than half a percent of all mortgages lent in recent years after 2008.
"We saw then the 125 per cent loans to value, 100 per cent was very common, and that has now been brought back I think to try and solve the problem of the housing market."
Across Britain, the average asking price for a first-time buyer-type property is sitting at a record of £224,963, according to data by property website Rightmove.
The average asking rent for a first-time buyer type property is £1,120 per month, having increased 11 per cent compared with last year, the website added.
In a discussion during Breakfast with Eamonn Holmes and Isabel Webster, Rolande said: “There is a great danger in lending these out willy-nilly.
“If they're targeted very carefully to people who can show a very good credit history and have some special circumstances, then it's not a bad thing.
“People want to own their own homes and if they've been paying a rent that's equivalent to a mortgage, then why not?
“But my concern would be if somebody hasn't been able to save up even just a few thousand pounds over a number of years, what would happen if they do buy a property with 100 per cent mortgage, they're calling them no deposit or deposit free loans. They're actually 100 per cent mortgages.”
Jonathan Rolande warned of the risk the new mortgage products brought with them
GB News
He added: “I think the bank behind this has effectively rebranded it.
"What will happen if a person has an unexpected bill, or a change in circumstances where perhaps one of the couple can’t work or loses their job or something like that?
“What will happen then? And, of course, with rental, there's a lot more support from the Government compared to owning a property.
“So, if you lose work, then it's possible to get housing benefit and that's much more difficult with ownership.”
You may like
