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Problems in housing market for younger Scots

November 1, 2009 by admin  
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It has been claimed that in the current financial climate many younger Scots are suffering problems when it comes to getting onto the property ladder.

As in other parts of the UK the lenders in Scotland are demanding crippling deposits for mortgage loans, and , who are typically younger buyers, in Scotland simply cannot raise these deposits in most cases, and are therefore being effectively frozen out of the market.

In some cases lenders are asking for deposits of 25 percent or more, and for the average in Scotland this is an amount that is very difficult of even impossible to find.

It has been claimed that the most competitive deals from Scottish lenders are now only available to those that have a huge deposit to put down and existing homeowners that have a lot of equity in their homes. This means that many first time buyers are stuck with high rate mortgages, or in some cases are not able to get a mortgage at all.

An official from an estate agency stated: “The onerous requirements for deposits of at least 25% are greatly limiting most people’s ability to get on the housing ladder. If the flow of first-time buyers is restricted for too long then it will impact negatively on the market as a whole. We’ve witnessed a palpable increase in banks’ willingness to lend money in recent months, but there hasn’t been a great deal of loosening of the criteria. “

He added: “You can still get products that don’t require you to give a 25% deposit, but you’ll pay a hefty premium percentage rate. Banks will argue they’re only rebuilding their balance sheets as they’ve been instructed to do by government, but there are some pretty healthy margins out there – especially if people don’t have the 25% deposit.”

Tags: first time buyers, scottish housing market, deposit problems, percentage rate, first time buyer, house prices, housing market, official

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