Abbey, Halifax and Co-operative Bank are all offering incentives to first time buyers as they vie for customers.
Halifax is offering to pay its customers' council tax bill for the first six months, Abbey has cut its mortgage
rate for buyers with small deposits, and the Co-op has made it easier for first time buyers to borrow more.
These are just some of the incentives that lenders are offering at the moment to lure first time buyer mortgage
Until May 23, first time buyers opting for a Halifax mortgage
will get their council tax paid for the first six months in their new home, adding to its existing offer to pay the stamp duty for any customer buying their first home with Halifax.Abbey mortgages
have retaliated by cutting the cost of their five year fixed rate mortgage
for first time buyers to 6.89 per cent, requiring a deposit of just 10 per cent, and slashing the fee from £2499 to £995.
Co-operative Bank, meanwhile, has enabled first time buyers to borrow more than they might be able to based on their own salaries, by allowing them to use a parent or other relative and their income as a guarantor for the mortgage repayments.
Since the property market's peak, first time buyers have been largely frozen out of the mortgage market by lenders' expensive rates and demands for higher deposits.
Consequently, first time buyer mortgage approvals for February were half what they were at the same time last year, and at their lowest level since records began, according to mortgage data from the Council of Mortgage Lenders (CML
The average LTV (loan to value) has also contributed to creating a more hostile market for first time buyers, climbing to an average 89 per cent LTV in February this year, compared to 75 per cent at the same time in 2008.Compare mortgage quotes »
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