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.
- Getting a mortgage still a struggle for first time buyers Officials from a leading mortgage broker have said that many first time buyers in the UK are still struggling enormously when it comes to getting a mortgage loan. Industry experts from John Charcol have said
- Mortgage lenders attempt to cut costs There has been evidence that competition in the mortgage market is hotting up again, with lenders striving to increase their share in the mortgage market by trying to cut costs for potential buyers. Many lenders are
- One in ten struggling to pay their mortgage Recent reports have suggested that around 10 percent of homeowners are struggling to make repayments on their mortgages. Industry officials have stated that one in ten homeowners is finding it difficult to make mortgage repayments.
- First time buyers could be affected by return of buy to let landlords According to a recent report a rising number of lenders are starting to approve mortgage deals for buy to let borrowers following a rocky period when fewer and fewer of these deals were being approved.
- 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
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