'Content The Woolwich has created a specialized tracker mortgage designed for highly-paid city workers such as bankers, entrepreneurs, hedge fund managers and consultants, who are expecting a bonus in the New Year but want to buy a property now. The Woolwich claims that the 'city bonus' mortgage is the first to exclusively target this professional group based on bonus rather than salary expectations.
The mortgage is only accessible to those wishing to borrow over GBP500,000, and is predominantly designed to help highly-paid professionals to purchase houses before property prices rise any further. Experts agree that house prices are rising faster than was expected for the year, particularly in London where the majority of the Woolwich's target market live and work. Recent government figures revealed that the average British house rose in price by GBP3,000 during August, while the value of the most expensive homes in the London borough of Kensington and Chelsea has risen by a reported 25% since January.
With property prices continuing upwards, it is hardly surprising that workers expecting a large bonus in six months' time might be eager to purchase before the market swells any further.
Furthermore, the loan is an interesting addition to the mortgage market. Given its small target market, it will remain a highly niche product, but may well see encouraging demand nevertheless. Moreover, with a fee of GBP1,499, charging 4.24% interest until July 2007, before reverting to 5.24%, the loan is not uncompetitive.
However, such a mortgage is what some will consider to be yet another of a recent crop of new mortgages encouraging more and more people to increase their loans. Although city workers such as brokers and fund managers are predominantly a well-paid segment with high levels of disposable income, there are risks that promised bonuses will never materialize. So, while the mortgage deal may seem like a dream come true for these consumers now, the reality may not quite match the fantasy when the New Year comes around.
Sign up to our weekly newsletters for the latest industry news & comment.
- Unsubscribe details are contained within each Email
- To subscribe simply enter your Email address in the box above and click the subscribe button