Home builder's 4.99% mortgage 'shows market is moving again'

Published on Tuesday 26 August 2008 21:56

A SCOTTISH home builder has launched an exclusive discount mortgage deal to attract business during the credit crunch.

Stewart Milne Homes, which operates throughout Scotland and northern England, is offering buyers of a range of its properties a 4.99 per cent fixed mortgage for the first three years.

The mortgages, which are financed by the firm, are being offered in an attempt to re-energise the housing market.

Sean Gardner, a director of MoneyExpert.com, said: "Products such as this from Stewart Milne offer clear evidence that the mortgage market is starting to get moving again, and with other providers dropping their rates in recent weeks there's a definite air of competition.

"The product's obviously unconventional, only being applicable to certain properties, but at 4.99 per cent it is definitely worth considering if those properties are suitable."

Steve Turner, a spokesman for the Home Builders Federation, described the offer as "innovative". He said: "Builders are looking at all ways to attract customers at the moment. Mortgage rates are actually back to where we were in August 2007, which is a positive sign for builders.

"The crux of the problem is the lack of liquidity in the lending market, as if you can't get a mortgage it doesn't matter what incentives are being offered."