First time buyers struggling more than ever
May 15, 2008
First time buyers are thought to be facing their toughest challenge yet when it comes to getting onto the property ladder, with officials warning that whilst income levels have only gone up by 53% on average over the past ten years, house prices have rocketed by 200%. Officials from the housing charity Shelter state that in addition to these figures the mortgage meltdown in the UK is making the prospect of homeownership even more impossible for the average first time buyer.
An official from Shelter said: ‘Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse. It means there is a generation of young people and young families being locked out of the housing market without a hope of ever sharing in the asset wealth of the generation before.’
The base rate has fallen three times since December, but despite this many mortgage lenders have been hiking up their rates for new borrowers. In addition to this they have tightened their lending criteria, making it very difficult for the average consumer to get an affordable mortgage, and to top it all many are now demanding far higher deposits that the traditional 5%, which is even more of a struggle for first time buyers with no previous property from which to take equity to put down as a deposit.
Whilst house price inflation is plummeting, and house prices are set to fall over the next couple of years, the tough credit conditions could means that it is impossible for some first time buyers, particularly those on lower incomes, to save a deposit or be able to afford to take on a mortgage, particularly given the withdrawal of 100% mortgages.
- October 2007 saw homeowners struggle with mortgage payments Mortgage payers in the UK encountered a difficult month in October when it came to making mortgage repayments according to recent data from the Council of Mortgage Lenders. High interest rates and property prices, coupled
- Sharp fall in low deposit mortgages According to recent reports there has been a sharp fall in the number of low deposit mortgages that are available on the market, making the situation increasingly difficult for first time buyers who want to
- Lenders may be able to flag up struggling borrowers more easily Bad debt levels in the UK have caused huge problems for lenders and finance companies over recent years, and lenders have been increasing stringency and looking for new and inventive ways to not only recoup
- Credit crunch does not stop asking prices from rising According to recent reports asking prices on some properties are still increasing despite the fact that property values have been falling for almost a year. Figures have revealed that the mortgage famine and falling property
- Property website reports loss of three hundred estate agents a month The property website Right Move has recently reported that each month around three hundred struggling estate agents are quitting the service, as the housing market continued to decline and the housing slump affects the estate
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