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A&L stepping in to help FTBs on duty

Alliance & Leicester is moving into the specialised first-time buyer market in its first venture into specialised lending.

It is offering a three-year fixed-rate mortgage which will be available direct and through intermediaries. The first step product is aimed at helping FTBs cover the cost of stamp duty. The client will get 1,500 cashback on loans between 25,000 and 100,000 and 2,500 cashback between 100,001 to 250,000. A&L says the cashback is designed to be attractive but responsible.

The fixed rate is 5.99 per cent for three years with no fee and valuation refunded on completion. There is an early repayment charge of 3 per cent of the outstanding balance if redeemed before May 31, 2008. The product is available up to 95 per cent loan to value.

After the fixed period, the mortgage becomes a base rate tracker plus 75 basis points.

First Step comes to the market as A&L lobbies the Government for FTBs to be exempt from stamp duty. It forecasts that 90 per cent of FTBs will have to pay stamp duty within three years. The nil-rate threshold is 60,000 but the average property price is now to 145,408, according to figures from the Office of the Deputy Prime Minister.

Director of mortgages, savings and investment products Stephen Leonard says: “Stamp duty was never intended to be a prohibitive tax and with the first-time buyer market activity at a 20-year low, it seems this group of people could do with a helping hand.”

Alexander Hall chief operating officer Andy Pratt says: “For those without a large deposit, this type of mortgage can be very useful.”



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The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. Forecasts and past performance are not a guide to future performance. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this document is deemed to be impartial research. We do not undertake to advise you of any change to our views.


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