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Are you hoping to get onto the property ladder this year?

January 30, 2010 by admin  
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Over the past couple of years first time buyers have been hit with a whole new problem. Following years of lack of affordability because of the sky high value of properties many first time buyers probably thought that their time had finally come when property prices started to plummet.

However, unfortunately it wasn’t only house prices that started falling back in the autumn of 2007 – it was also the availability of mortgage loans, which resulted from the global credit crunch that swept across the UK at that time and continues to wreak havoc even now.

Since the end of 2007 many first time buyers have continued to suffer a severe lack of availability when it comes to mortgages, and for many this has resulted in their dream of owning a home remaining out of their reach. Lenders brought in extremely stringent regulations after the onset of the credit crisis, and first time buyers were amongst the groups that were set to suffer the most as a result of this.

Whilst there has been some improvement in mortgage availability over recent months, first time buyers still face a very tough time when it comes to getting their own home. It is not just the mortgage market that stands in their way – the fact that some buy to let landlords are now looking at expanding their portfolios means that often first time buyers may lose out on cheaper properties to investors that have cash ready or who are in a better position to get the finance from the banks.

One of the major things that stands in the way of first time buyers and homeownership is the deposit that lenders are demanding to get a mortgage. Most are now looking for at least 15 percent of the property value in order to grant a mortgage, and some will want even more. First time buyers therefore need to remember that they will need a fairly sizeable deposit if they want to get a mortgage, and will need to think about how they can get this if they do not already have it saved.

If you are one of the ones that does not yet have a high level of deposit available but you do want to try and get on the property ladder now before property prices start rising further then there are a number of options you can look at. Of course, you may have family members that are prepared to lend you the money towards your deposit, and many younger first time buyers have resorted to this. Another alternative is to look at purchasing a property with a partner or a friend, which would mean that you can both put towards the deposit.

Alternatively, if you want to keep the level of deposit down you could look into purchasing a shared ownership property, where you would only need a mortgage for the percentage of the property that you are buying. Whilst you would not own the whole property right away this would mean that you would only have to pay a deposit on the value of the share that you are buying, and you will still have got onto the first rung of the property ladder.

Tags: Mortgage loan, first time buyer, Real estate, mortgage, Subprime crisis impact timeline

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