Help is on the way for families buying £1m homes
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The Ipswich Building Society is upping the maximum size of its home loans to £750,000, to help ‘leap-frog’ buyers climb the property ladder.
The society says it is making the move in response to rising house prices locally in Suffolk and nationally.
While the average house price in Ipswich is around £265,000 and around £318,000 in Bury St Edmunds, there are property hotspots in the county where the price of family homes are qucikly rising past the £1m mark.
Meaning standard mortgages can make it difficult for people to bypass a rung on the property ladder, unless they have considerable equity in their existing property to fund the shortfall.
Addressing this, Ipswich Building Society have upped their maxiumum loan on standard products to £750,000, allowing those with £250,000 equity to purchase a £1m property with a 75% LTV mortgage.
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Building Society chief executive Richard Norrington said: "We recognise that the UK housing market is changing: as well as a general upwards trend in house prices, we've seen some buyers missing out several rungs on the property ladder and going straight from a starter home to a much larger or 'forever' home.
"This probably reflects the fact that people are buying their first property later in life but then quickly requiring greater space for a growing family.
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"By increasing the maximum loan size across our standard products, we hope to be able to support these 'leapfrog buyers' as well as others who need to access larger mortgages to reflect house price growth in their area."
As well as straight forward house purchase loans, the society does consider 80% LTV loans for self-build, conversion and new-build projects.
The new increased upper lending cap will be available across all the society's 75% LTV loan range of products, with other loans remaining to be capped at £500,000.
Estate agent James Neal, of Fenn Wright, welcomed the move and said demand was still holding firm in the Suffolk Coastal and Woodbridge area despite concerns over Brexit.
He said: "There is a good steady demand and houses are still selling. Sales over the past four weeks have been surprisingly good. We have recent offers on properties in excess of £1m, which is good."
Tims Dansie, of Jackson-Stops in Ipswich said: "Anything that stimulates the housing market is a good one. With the Ipswich Building Society allowing loans on the higher value properties it must be good for that section of the market, and for the market overall, as homes are often involved in chains of sales."