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TSB launches first-time buyer mortgage range as research shows renters still struggling to buy despite stalling property prices

6th December 2023

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TSB research was carried out by IPSOS among a nationally representative quota sample of 2,187 adults aged 18 to 75 in the UK, between 29th September – 3rd October 2023. Of the overall sample, 820 were adults who rent, or live in rent or rent free accommodation. ONS rental data can be found here. The First-Time Buyer product will be available for customers from tomorrow. The key features of the mortgage range are as follows: The First-Time Buyer product range interest rates will start from 4.64%. The range includes fixed two-year, three-year and five-year products, plus a 2-year tracker product. Following the end of the fixed term, customers will move onto a lower follow-on tracker rate of 2.49% above base rate and currently 7.74%, instead of the current TSB Homeowner Variable Rate of 8.74%. This means that all First-Time Buyer products will result in a lower total amount payable (TAP) over the term of the mortgage compared to TSB’s home mover products if the customer remained in the tracker – so customers will pay back less as they repay their mortgage. For example, a customer borrowing £100,000 over 30 years at an initial rate of 4.64% would now pay a TAP of £249,628 instead of £272,019. As a result of the lower follow-on tracker rate, First-Time Buyer applications will be stressed at a rate that is 1% lower than other applications. This will help more first-time buyers to be able to buy the home they want, whilst ensuring doing so remains affordable for them over the full life of their mortgage. TSB research was carried out by IPSOS among a nationally representative quota sample of 2,187 adults aged 18 to 75 in the UK, between 29th September – 3rd October 2023. Of the overall sample, 820 were adults who rent, or live in rent or rent free accommodation. ONS rental data can be found here. The First-Time Buyer product will be available for customers from tomorrow. The key features of the mortgage range are as follows: The First-Time Buyer product range interest rates will start from 4.64%. The range includes fixed two-year, three-year and five-year products, plus a 2-year tracker product. Following the end of the fixed term, customers will move onto a lower follow-on tracker rate of 2.49% above base rate and currently 7.74%, instead of the current TSB Homeowner Variable Rate of 8.74%. This means that all First-Time Buyer products will result in a lower total amount payable (TAP) over the term of the mortgage compared to TSB’s home mover products if the customer remained in the tracker – so customers will pay back less as they repay their mortgage. For example, a customer borrowing £100,000 over 30 years at an initial rate of 4.64% would now pay a TAP of £249,628 instead of £272,019. As a result of the lower follow-on tracker rate, First-Time Buyer applications will be stressed at a rate that is 1% lower than other applications. This will help more first-time buyers to be able to buy the home they want, whilst ensuring doing so remains affordable for them over the full life of their mortgage. The information contained in this press release is intended solely for journalists and should not be used by consumers to make financial decisions.

 

  • TSB research shows that renters still see significant challenges to buying home despite stalling property prices  
  • TSB launches first-time buyer (FTB) range to help customers into their first home

Research by TSB points to the range of challenges faced by renters looking to take their first steps onto the property ladder.

Over a third (35%) of those surveyed who were not homeowners said that they did not expect to buy a home at any point in the future, while less than a third (29%) expected to become homeowners within the next 5 years.

While property prices were cited as an obstacle to buying a home by 45% of renters, the challenge of not being able to save for a deposit (33%) and not earning enough to qualify for a mortgage (or the mortgage required) (33%) were also cited as an obstacle by a third of those who did not own a property. This comes at a time when rental prices are increasing at a significant rate – ONS data shows a 6.1% rise for private tenants in the 12 months to October 2023. 

Renting was also linked to economic uncertainty with 76% of private renters saying that they had experienced moments of anxiety or worry related to their finances in the previous six months (compared to 46% of people who owned their home outright).

To support those wanting to buy their first home, TSB has launched a mortgage product range specifically for first-time buyers. The mortgages will enable first-time buyers to move automatically onto a follow-on tracker rate that is lower than the current TSB Homeowner Variable Rate after the fixed period ends. This means that the total amount payable (TAP) during the mortgage term will be reduced.

Deby Herring, Head of Mortgages at TSB, said: “Whilst the levelling out of prices might be good for first-time buyers, it isn’t just the cost of housing holding them back. There is a range of other factors making it hard for them to take their first step.

“At TSB we’re keen to provide support where we can, and our new first-time buyer mortgages will give customers greater flexibility when taking out their first mortgage”.

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Notes to editors

 

  • TSB research was carried out by IPSOS among a nationally representative quota sample of 2,187 adults aged 18 to 75 in the UK, between 29th September – 3rd October 2023. Of the overall sample, 820 were adults who rent, or live in rent or rent free accommodation.
  • ONS rental data can be found here.
  • The First-Time Buyer product will be available for customers from tomorrow. The key features of the mortgage range are as follows:
    • The First-Time Buyer product range interest rates will start from 4.64%. The range includes fixed two-year, three-year and five-year products, plus a 2-year tracker product. Following the end of the fixed term, customers will move onto a lower follow-on tracker rate of 2.49% above base rate and currently 7.74%, instead of the current TSB Homeowner Variable Rate of 8.74%.
    • This means that all First-Time Buyer products will result in a lower total amount payable (TAP) over the term of the mortgage compared to TSB’s home mover products if the customer remained in the tracker – so customers will pay back less as they repay their mortgage. For example, a customer borrowing £100,000 over 30 years at an initial rate of 4.64% would now pay a TAP of £249,628 instead of £272,019.
    • As a result of the lower follow-on tracker rate, First-Time Buyer applications will be stressed at a rate that is 1% lower than other applications. This will help more first-time buyers to be able to buy the home they want, whilst ensuring doing so remains affordable for them over the full life of their mortgage.
 
The information contained in this press release is intended solely for journalists and should not be used by consumers to make financial decisions. ​

 

TSB Bank plc. Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland, no. SC95237.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 191240.

TSB Bank plc is covered by the Financial Services Compensation Scheme and the Financial Ombudsman Service.

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