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Best 10% deposit mortgages: What are the top rates for first-time buyers?

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Mortgages needing 10 per cent deposits are continuing to return to the market, in a welcome move for first-time buyers.

Lenders have launched 117 new products since the beginning of the year, and 29 in the first two weeks of February alone, according to information website Moneyfacts.

These lower-deposit mortgages are popular with first-time buyers, but are also used by homeowners who have low equity for other reasons.  

Mortgages with 10 per cent deposits are most often used by first-time buyers

Mortgages with 10 per cent deposits are most often used by first-time buyers

There are now 277 10 per cent products on the market, which is still far lower than than the 776 that were on offer a year ago in February 2020.

However, it is a big improvement compared with the 44 deals that were available in September 2020.

Most lenders withdrew their higher loan-to-value mortgages from the market around the time of the first national lockdown in mid-2020.

They cited worries about their capacity to deal with new applications when staff were working from home as the main reason, however there would also have been concerns about changes to people’s financial circumstances and the risk of negative equity.

Five new lenders have entered or re-entered the market since the beginning of this month, and 15 if you count both January and February.

First-time buyers with a 10 per cent deposit will also find more cashback offers on the market today, rising from 50 to 83 over the past month, available from 17 lenders compared to 12 in January. 

It is not all good news for those trying to get on the property ladder, though. 

While lenders have been slowly reducing their rates since they re-entered the market, they remain relatively high compared to other products in the market, as well as to 10 per cent mortgage rates pre-pandemic.

The average two-year fixed rate mortgage with a 10 per cent deposit now has an interest rate of 3.56 per cent, almost one percentage point more than in February 2020. 

While the five-year fixed rate equivalent at 3.68 per cent has dropped by 0.04 per cent since the start of the month, it is also 0.77 per cent above the February 2020 rate.

In contrast, those with 40 per cent deposits are currently enjoying rates of less than 1.2 per cent. 

And while the outlook is improving for those with 10 per cent deposits, there are still few mortgages available for first-time buyers with only five per cent to pay up front.

There are some products on the market, but most are only open to existing borrowers looking to remortgage, or require a guarantor.

Mortgage products available. Figures apply to first day of the month unless otherwise stated

Mortgage products available. Figures apply to first day of the month unless otherwise stated

Eleanor Williams, finance expert at Moneyfacts, said: ‘While average rates – historically often higher than those available in lower LTV brackets due to risk – are above where they were a year ago, those for whom the longer-term stability of a five-year fixed may suit their circumstances may be pleased to note this rate has reduced 0.04 per cent since the start of this month alone.

‘There are of course still hurdles for these borrowers to overcome. House prices inflated quite significantly last year – although early indications are this may be slowing in 2021 – and savings rates have continued to descend to rock bottom lows, making building a larger deposit difficult, as have high rental payments. 

‘But their options have been steadily increasing, and added to the news that the homebuyers using the current Help to Buy equity loan scheme have a further extension on the deadline for completions, there is hope that 2021 may see more potential home-buyers take that first step onto the property ladder.’ 

The best low deposit rates

Here are some of the best rates currently available to those with a 10 per cent deposit:    

Lloyds has a two-year fixed rate of 3.39 per cent with no fee. 

HSBC  has a two-year fixed rate of 3.44 per cent with no fee.   

Natwest has a two-year fixed rate of 3.48 per cent with no fee.  

Platform has a two-year fixed rate of 3.19 per cent with a £749 fee.  

Use our calculator to weigh up fees versus rates and find the best deal

HSBC accepting bonuses as income for applications 

In further evidence that mortgage providers are gradually broadening their horizons, HSBC said yesterday that it would begin accepting commission and bonuses as a valid form of income in mortgage applications again.

The lender made changes to its variable pay policy to allow income from commission and overtime, in addition to quarterly, half-yearly or annual bonus payments, to be used to support mortgage affordability. 

However, the most recent payment must have been received in 2021.

Michelle Andrews, HSBC UK’s head of buying a home, said: ‘We are all looking forward to normality returning, and the inclusion of overtime, commission and bonuses to support a mortgage application is one bit of normality that will be welcomed by many looking to move on to or up the property ladder.’

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Godwin submits plans for Dorset mixed-use development (GB)

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Godwin Developments has submitted a planning application for Woodbury Park, a brand-new commercial development located at a prominent 4.85-acre site in Bere Regis, Dorset. Proposals include four purpose-built drive thru and drive to roadside retail units, with renowned restaurant brands PopeyesStarbucks and McDonald’s already lined up to take space, which has been designed to their specifications.

 

The scheme will also feature a 12,000ft² block of up to eight units, with associated parking and turning facilities. The units will be two storeys high, with the flexibility to combine into larger floorplates, if required by potential tenants. The block will be built speculatively and will target BREEAM Very Good, including features such as air source heat pumps, low energy lighting and highly efficient building fabric, to name a few.

 

Situated off the Townsend Roundabout at the northern entry point of Bere Regis, the site benefits from a high passing traffic flow of over 27,000 daily vehicles. It occupies a key location at the intersection of the A31 and A35 alongside the main arterial route connecting Poole and Bournemouth to Dorchester.

 

The Woodbury Park scheme will further Godwin’s commitment to local regeneration and job creation by enabling up to 250 new employment opportunities. Roles are anticipated to be primarily in retail, distribution and logistics, as well as services, manufacturing, technology and the creative industries. Local people will also benefit from the inclusion of several EV charging points, the first in the area.

 

Claudine Tracey, Development Manager at Godwin Developments, said: “The site’s high traffic flow, lack of similar offering close by, and proximity to existing Shell garage and trade park make Woodbury Park a sought-after location for a range of occupiers – including coffee and quick service restaurant brands. We are also delighted to be delivering the UK’s first Popeyes drive thru as the company expands its footprint in this country. In addition, our development will deliver a variety of local employment opportunities for Bere Regis through the provision of flexible industrial and logistics space suitable for new and existing businesses. The scheme at Bere Regis showcases Godwin’s unique capability to successfully combine industrial and roadside retail to maximise a site’s potential through complementary uses.”

 

Stuart Pratt, Director at Godwin Developments, commented: “The recent boom in takeaway food consumption and hyper-local convenience shopping is bringing ever more exciting brands to the roadside retail sector. At the same time, demand for industrial and logistics space is continuing to grow with units of varied sizes – including trade parks – experiencing a substantial lack of supply. For these reasons interest from investors into both sectors has been very strong in the past year; and we expect the trend to continue throughout 2022 on the back of strong consumer fundamentals.”

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Barings and HBD secure planning for London logistics scheme (GB)

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Barings and HBD have secured detailed planning for a strategic logistics scheme in Rainham, London, transforming a 20-acre brownfield site. The new development, Momentum London, is being delivered by Barings and HBD in a joint venture partnership. It will create 381,814ft² of new logistics and industrial space across four units ranging from 41,000 -171,000ft².

 

The scheme will target Net Zero Carbon, BREEAM “Excellent” and an EPC “A+” rating. This is being achieved by dynamic design, careful consideration of materials, zero use of fossil fuels, maximizing photovoltaic solar panels, battery storage and intelligent building systems. The units will be 100% EV ready, including passive fleet charging to the yards.

 

The logistics park will be set in landscaped environment with picnic and public areas, as well as direct access onto the Thames Cycle Path, so that it brings further social benefits to the area. Positioned on the River Thames, with potential for jetty access, Momentum will offer an easy stepping stone into Central London and out via the A13, just minutes away.

 

Darren Hutchinson, Head of UK Real Estate Transactions and Managing Director at Barings, said: Momentum London will be a strategically located logistics scheme with strong environmental and social credentials, beneficial both to future occupiers and the communities around it. Logistics is one of Barings’ preferred investment sectors and Momentum London exemplifies the kind of developments we’re seeking, with a keen interest in exploring joint ventures like this one with HBD.”

 

Simon Quine, Senior Development Surveyor at HBD, said: “Industrial and logistics space remains in very limited supply across London, particularly larger distribution units. Momentum will plug that gap within the M25 and provide modern, sustainable logistics and distribution space to serve London and the wider South East market. Landscaping and wellness have been thoroughly considered, with careful design considerations and enhancements to the Thames Foot and Cycle path, which we hope will help occupiers to attract and retain staff.”

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Mirrored furniture trend can create the illusion of space in your home

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Mirrored furniture provokes strong emotions. Some see it as the epitome of bad taste, flashy and bling. Others know that mirrors have magic powers.

A mirrored table or cabinet makes a room or a hallway appear more swish and spacious. It’s a trick that bars and restaurants employ to ensure their establishments appear roomier and more inviting — and they can add lustre to your home, too.

Choosing a piece of mirrored furniture also sends out a sign that you are aware of one of the year’s trends — the return of Art Deco, the influential style that emerged in the 1920s. 

Reflections: A mirrored bedside table. The power of the mirror to create an impression has been recognised for centuries

Reflections: A mirrored bedside table. The power of the mirror to create an impression has been recognised for centuries

It blended forms that celebrated modern machinery with decorative elements drawn from Greco-Roman culture and nature. 

The mirror was a favourite material, used on the surfaces of furniture and walls to supply a shimmering silver and gold effect.

Probably the most famous piece of Art Deco architecture is New York’s Chrysler Building. Completed in 1930, its sunburst-patterned stainless steel spire remains one of the key elements of the Manhattan skyline.

Art Deco console tables, drinks trolleys and other items from the era of the building’s construction sell for thousands on auction sites such as 1stdibs underlining the growing appeal of this aesthetic. 

Jamie Watkins, the co-founder of fabric and wallpaper company Divine Savages, explains Art Deco’s allure for a new audience.

‘Art Deco, with its bold geometrical patterns was such an iconic period for design: it’s synonymous with glamour and luxury.’

The resurgent popularity of Art Deco is also based on its practicality: a mirrored piece works with almost any interior, adding interest and depth.

The power of the mirror to create a wow impression has been recognised for centuries. 

Examples of this technique include the round mirror on the wall behind the bride and groom in Jan van Eyck’s 1434 Arnolfini Portrait in the National Gallery. It sends out the message that the couple are discerning — and wealthy.

Cheers: B&M's £25 oval drinks trolley with two mirrored shelves

Cheers: B&M’s £25 oval drinks trolley with two mirrored shelves

The hall of mirrors in the palace of Versailles was designed to be a place of beauty, but also to display the financial resources of Louis XIV, the Sun King. Mirrors were a luxury item until an inexpensive manufacturing process was invented in the 1830s.

In 2022, it is possible to pick up mirrored pieces for under £100. B&M has a £25 oval drinks trolley with two mirrored shelves that would lend an air of Thirties elegance to any gathering. The £94.99 Ellison serving cart (a U.S. term for drinks trolley) from Wayfair has a similar vibe.

If you believe that the right mirrored trolley would save you money on trips to bars, the larger £144.95 gold oval mirrored trolley from Melody Maison could be the thing.

A mirrored cocktail cabinet will dazzle guests. The £1,200 Primrose & Plum champagne and gold cabinet has a Jazz-Age feel.

The £299 Venetian sideboard from Furniture Market, meanwhile, is a more modestly priced way to conjure up the party spirit of the Roaring Twenties.

The show flats of apartment blocks are often equipped with mirrored cocktail cabinets containing bottles of spirits and crystal glasses. This makes buyers dream of dinner parties, with a prelude of aperitifs, but also serves to make the apartment appear even roomier.

A console table in the hall also creates an illusion of space which can be amplified by the addition of a lamp. HomesDirect365 has a range in the style of almost every era including Art Deco, Regency, the 1960s and the 1970s. Prices start at £233.

The bedroom is often the most cramped room in either a house or flat which is why this can be the best place to experiment with mirrored furniture. 

The desire to preserve family harmony is another reason. The other members of your household may prefer the kitchen and living room to be slick and understated, seeing anything mirrored as excessive.

In the bedroom, however, you can indulge your decor fantasies. Habitat has the one-drawer Hepburn bedside table for £76.

Next offers the antique effect Fleur bedside table which costs £225 for the one-drawer version and £275 for the two-drawer version. 

The Fleur is also available as a six-drawer chest for £599 or a £1,150 double wardrobe if you seek to waft around your bedroom channelling your inner 1930s Hollywood screen siren. 

Dunelm’s Venetian mirrored dressing table also offers a chance to live out your dream of silver screen stardom (£449).

If mirrored furniture has brought out your party animal, kindling a passion for Art Deco in every guise, Divine Savages offers Deco Martini wallpaper whose design is based on the geometric forms, with a hidden Martini glass within the print (£150 per roll).

Some of your guests may not be too busy checking out their reflections on the doors of the mirrored cabinet to notice this subtle and witty detail in the wallpaper.

Savings of the week! water jugs… Up to 52% off 

The Sandvig hammered-glass jug from made.com is half-price at £22

The Sandvig hammered-glass jug from made.com is half-price at £22

Sitting outside on a sunny afternoon is already delightful. But it is even more enjoyable if you are sipping on a cool drink or an iced coffee from a generously sized jug, or maybe even a Pimm’s. The arrival of the July sales means bargains abound.

If you prioritise practicality, Ocado’s textured lustre plastic picnic jug has 33 per cent off at £8.

The price of the pleasingly geometric plastic smoky-grey Prism jug from Wayfair is 16 per cent off at £10.10. 

If you would like to feel as if you are in the south of France, John Lewis has the plain glass Arles wicker-wrapped jug. It is reduced from £25 to £12, down 52 per cent.

Wanting something more elegant that you can also use for flowers? The Sandvig hammered-glass jug from made.com is also half-price at £22.

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