First time buyer age soaring

A recent study has shown how the average age of the first time buyer has soared over recent decades, with the younger people of today expecting to be around twelve years older than their parents were when they manage to purchase a property for the first time. The study was carried out by the Post Office and showed that the difficult economic and financial climate had really taken its toll on potential first time buyers.

Over the past few years, first time buyers have been hit hard by the problems in the mortgage and property markets. Many have been unable to afford to raise the huge deposits that lenders have been demanding and many others have been unable to get a mortgage at all due to increased restrictions and stringency from lenders, who have been exercising increased caution.

The study involved polling parents and younger people and showed that the average age of parents when they bought their first property was around twenty three whereas their kids expected to be around thirty five years of age on average by the time they managed to afford a property themselves. This would see the average age of the first time buyer soar by twelve years, with parents in the 1960s purchasing in their mid twenties and younger people today having to wait until their mid thirties. The average twenty-something of today earns around £21,000 in terms of salary, but with average property prices at £164,000 most would be unable to consider buying a property on their own.

One industry official stated: “Many would-be first-time buyers may have been put off trying to get onto the housing ladder by the size of deposits now needed. Some may be deterred by their perception of high mortgage repayments.”

Tags: 1960s, average property prices, would-be first-time buyers, post, recent study, GBP

Half of young Brits think renting is a waste of money

It has been revealed in a recent survey that around half of young Brits believe that renting a property is a waste of money. However, despite this opinion many are being forced to rent because they are unable to get a mortgage in the current climate to get onto the property ladder and get a place of their own.

Recently released figures have shown how restrictions in the mortgage market are driving up the cost of renting, and whilst many non-homeowners believe that renting is a waste of money more and more are having to do this and pay more for the privilege. With so many would be first time buyers unable to get a mortgages the demand for rental properties is high, and this is driving property rental prices up further.

Recent research has shown that the amount that buyers are now expected to pay out by way of a deposit is unmanageable for many people, and whilst buyers may have no problem affording the repayments on a mortgage, especially with the base rate at an all time low, many simply cannot raise the deposit required by lenders, which is running into tens of thousands of pounds in some cases.

The level of deposit required in London has reached nearly £30,000 for first time buyers, which means that many are relegated to renting or living with friends and family. However, with the cost of rents having also rocketed some people in the London area would be looking at paying close to £1000 a month just for a one bedroom flat, with the average rent across the UK having now increased to nearly £700.

Tags: property, research, Renting, climate, london, tens of thousands

Why first time buyers could benefit from shared ownership

Buying a property has become an almost impossible feat for many first time buyers in the UK these days, not least because getting a mortgage loan has become so difficult. Whilst property prices have fallen since their peak they are still very high in the UK, and with lenders demanding a large percentage of the property value by way of a deposit many first time buyers still find themselves priced out of the market.

In some cases lenders are demanding in excess of 15 percent of the property value by way of a deposit, and this is something that most first time buyers cannot manage, as they have no pervious property from which to take equity. As a result of this many first time buyers are having to move into rented accommodation, which makes it even more difficult to save a deposit to get themselves onto the property ladder.

However, there is another option that could prove ideal for many first time buyers in the UK and this is an option known as shared ownership. With a shared ownership property buyers only get a mortgage for a set percentage of the property value, and the they then pay rent on the remaining share to a housing association. Because they are only buying a share of the property initially they will need a lower mortgage and a lower deposit, but can still get themselves on the property ladder, albeit more gradually than in the traditional way.

The share of the property that first time buyers can get will vary based on the property and the housing association, and could be anything from between 25 percent and 75 percent. Often the houses that are sold as shared ownership are new build, which means that buyers can get their hands on a brand new property without having to find a huge mortgage and deposit upfront.

The great thing about shared ownership is that you will not have to rent the remaining share of the property forever, as you can ‘staircase’. This means that over time you can buy additional shares of the property as and when finances allow until eventually you own 100 percent of the home. Alternatively you may wish to continue on a shared ownership basis and then sell your share of the home to another person that wants shared ownership when you want to move on.

A number of housing associations deal with shared ownership properties, and there are both new build properties available as well as resales from those that want to sell their own shares in these properties. Whilst there may not be a huge difference in the amount that you pay out monthly with shared ownership compared to getting an outright mortgage (although it is generally cheaper) the key advantage is that you will not need a huge mortgage or deposit to start off with and can buy the remainder of the home as and when it is viable for you.

Tags: first time buyer, Equity sharing, property, property ladder, mortgage

Is renting more viable than getting a mortgage?

 

Homeownership is a dream that many people hope to achieve, but over recent years many have experienced a range of hurdles when it comes to getting onto the property ladder. First time buyers in particular have experienced many difficulties from sky high property prices to lack of mortgage available, crippling deposit demands, and more.

 

One recent report has now questioned whether first time buyers are better off renting a property rather than trying to buy in the current climate. In the recent emergency budget it was announced that the new government was looking into scrapping the stamp duty holiday extension for first time buyers, creating further financial difficulties for those that were looking to buy.

 

In addition to this the new chancellor, George Osborne, announced that the Financial Services Authority would no longer exist in its current form and that the Bank of England would be given greater powers to regulate the banking sector, which could mean that a cap is placed on the amount that banks can lend, creating further difficulties for first time buyers.

 

Officials have said that this means first time buyers could face difficulties in finding an affordable property, getting an affordable mortgage, borrowing the amount that they need for the purchase, raising a deposit, and affording the repayments. If they rented, on the other hand, they would only have to pay a month’s rent and a deposit upfront and would not have to worry about repairs because this would be dealt with by the landlord.

An official from the National Landlord’s Association said: “At a time when government funding is strapped, it is private investment that will enable essential housing needs to be met. Rather than being seen as a last resort, private tenancies are becoming the choice of many people who need the freedom to choose homes where they need and for as long as they need.”

Tags: first time buyer, home, Renting, property, mortgage

New government may reverse stamp duty break for first time buyers

In the budget by the former Chancellor of the Exchequer, Alistair Darling, earlier this year it was announced that there was to be a stamp duty break for first time buyers in the UK, and that first time buyers would be able to buy a property up to the value of £250,000 without having to pay any stamp duty.

The former Labour government was hoping to help more first time buyers onto the property ladder and to revive the housing market through this move. The increased stamp duty exemption threshold was twice the standard levels, which is £125,000, and was made available for first time buyers only.

However, it has emerged that the new coalition government is considering scrapping the extension on stamp duty exemption, which means that first time buyers could have this important tax break pulled out from under them just months after it was originally introduced.

The extension on stamp duty exemption was set to last for two years until 2012, but as part a range of cutbacks the new coalition government could end up getting rid of the stamp duty break. The Conservative party had previously supported increasing the stamp duty exemption threshold for first time buyers, and the Labour party was said to have pinched the idea from the Tories.

In fact, many thought that the Conservative party would make the increased exemption permanent if elected, but instead the government is considering scrapping the tax break altogether in a bid to save more money to clear the public deficit.

The recent budget stated: ‘As announced in the Coalition Agreement, the Government will review the stamp duty land tax relief for first time buyers taking into account its impact on affordability and value for money.’

Tags: tax, Stamp duty in the United Kingdom, Herald Sun, chancellor, move, stamp duty

Boost your chances of getting a mortgage as a first time buyer

As many people are already aware getting a mortgage can be difficult for anyone these days, with the banks exercising extreme caution over who they lend to and putting a range of restrictions in place with regards to mortgage loans. However, one of the groups most likely to experience difficulties when it comes to mortgage loans is first time buyers.

There are many first time buyers that are desperate to get onto the property ladder, and have been for some time. However, for many years these potential buyers have faced difficulties when it comes to getting a property. Until the global credit crisis swept the nation first time buyers could get mortgages without even having to put down a deposit in most cases, but many could not afford the extortionate house prices that resulted from the many years of house price inflation.

Once the credit crunch hit property prices began to tumble, which is what many first time buyers may have been waiting for. However, at the same time as this the banks started to really rein in their lending, wiping out the 0 percent deposit that so many first time buyers had come to rely on and demanding huge sums up money upfront before even considering granting a mortgage loan. This has left first time buyers out in the cold once again, albeit for different reasons.

Whilst there is no doubt that first time buyers still face many challenges when it comes to getting a property there are some steps that they can take to try and improve the chances of getting onto the property ladder. One important thing to remember is that lenders are being very cautious over who they lend to, so it is advisable for first time buyers to be prepared and be aware of their credit rating. Before applying for a mortgage buyers are advised to order a copy of their credit report and check how good the rating is, as this will provide an idea of how likely it is that a mortgage will be granted.

Another think to consider is the level of deposit that the lender will want. Before wasting time looking at properties and applying for mortgages first time buyers should plan their budgets and spend time saving as much as possible, as the higher the deposit the more likely it is that an affordable mortgage will be granted by lenders.

Finally, more and more first time buyers are now turning to shared equity schemes, where they get a mortgage out to purchase a percentage of a property and rent the remainder from a housing association until they can also afford to buy the remaining share, which can be done in stages. This is a more effective and affordable way for first time buyers to get onto the property ladder these days, and it is possible to get a brand new house without having to take out a huge mortgage by using this option.

Tags: check, finance, first time buyer, ladder, Mortgage loan, potential buyers, money

Have things improved for first time buyers?

Over recent years things have gone from bad to worse for many non-homeowners that may have been hoping to get onto the property ladder. After years of soaring property prices many would be first time buyers will have been pleased to learn that prices starting plummeting following the onset of the global credit crunch in the latter part of 2007.

However, just as things looked as though they were on the up first time buyers were hit with a plethora of new problems, with the global financial meltdown resulting in severe restrictions on mortgages. This also led to banks increasing the level of deposit that they wanted from first time buyers, making it impossible for many people within this group to scrape together the minimum deposit that lenders were demanding to get an affordable mortgage.

The global credit crunch and he recession left many first time buyers hoping that their luck had changed and that things would ease off. For many this marked the chance of being able to get a property at last. However, this is not what has happened according to recent reports. Despite the recession being over and reports that banks were being more relaxed over lending first time buyers are still in for a bad time.

A number of reports have claimed that the banks are being increasingly cautious about mortgage lending and are still only offering their best deals to those that have a fairly sizeable deposit. This means that first time buyers need to be able to stump up a fair amount of cash towards a property if they want to get a mortgage that is affordable.

A number of things are thought to be affecting the decision of banks to continue their caution when it comes to mortgage lending. One has been the uncertainty over the running of the country resulting from the hung parliament following the general election recently. Whilst this is some way to being sorted, with leader of the Conservative party, David Cameron, now named as Prime Minister the country still finds itself in a situation that it has not seen for decades in the form of a coalition government formed with the Liberal Democrats.

Another of the factors thought to be affecting mortgage lending is continued uncertainty over jobs, with banks loathe to take the risk of lending in a climate where the risk of job losses is high.

Tags: finance, first time buyer, time buyers, mortgage, whilst, Mortgage loan, last, loan

First time buyers fail to budget effectively

A recent report has indicated that many first time buyers fail to budget properly before they make the move into their new home, and often receive a shock when they realise that they outgoings are going to be far higher than they initially anticipated.

Many first time buyers are budgeting for things such as deposits, mortgage repayments, and shopping, but are failing to get prices for essentials such as utilities, insurance cover, and the like. In addition, many fail to account for costs such as petrol and general spending money when they are working out affordability, and this can come as a shock when they actually move in to the property and start paying out.

Buyers that are moving into a property for the first time and are therefore unaccustomed to the services they will need and the cost of these services are advised to seek advice prior to accepting any mortgage offer, otherwise they could find themselves in a property with a mortgage but may not be able to afford to live there.

Common things such as monthly or weekly shopping, home insurance cover, television licence, utilities, broadband or Internet costs, mobile phone usage costs, and general day to day spending money are amongst the things that many first time buyers fail to budget for when working out whether they can actually afford to buy and live in their own property.

One first time buyer who purchased a property last year said that it was a shock over the first month or so as she realised how many things she hadn’t budgeted for before moving in.

She said: “I’ve had to change my lifestyle completely because of the amount that I am actually paying out compared to the amount I had budgeted for. I wish I’d spent more time working out my budget rather than rushing to buy a property.”

Tags: mortgage, finance, costs, budget, first time buyer

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

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. Read more

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

Buyers striving to complete property purchase before end of stamp duty holiday

Many buyers are now said to be rushing to try and complete the purchase of a property before the stamp duty holiday in the UK comes to an end. The stamp duty holiday was brought in last year in a bid to try and kick start the property sector. Read more

Tags: stamp duty, london, Richard Morea, Taxation, Stamp duty in the United Kingdom

Problems in housing market for younger Scots

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. Read more

Tags: housing market, house prices, scottish housing market, first time buyers, deposit problems

HSBC’s £1bn boost to first time buyer market

HSBC has allocated £1 billion to a new 90% loan to value product which it is hoped will give a much needed boost to the first time buyer market. Read more

Tags: Mortgages, deposit, support, credit, hsbc, leading the way

First time buyers still having to put up with renting

For many years many non-homeowners that simply couldn’t afford to buy a home due to ten years of rocketing property values have been waiting in the wings for property prices to start coming down again, over in the latter part of 2007 many were delighted to find that this was indeed happening at last. Read more

Tags: first time buyer, large number, bank of england, Mortgage loan, housing market, Mortgages, year, first time buyers

UK asking prices getting lower

A recent report has shown how asking prices on properties in the UK are getting lower with a fall of an average 3.2% in asking prices over recent weeks. The data comes from property experts Right Move. Many experts have already predicted that the housing market will continue to cool down over the coming year, and there has already been much evidence that the housing market is far more subdued than it was earlier in the year, with a number of factors dampening the housing and mortgage sectors.

One of the factors that is thought to have affected the housing market is the roll out of Home Information Packs, which were rolled out to all residential properties being marketed for sale in England and Wales from the middle of December 2007. This has caused “further confusion at a sensitive time for the property market” according to some experts. However, experts from Right Move have added that there is always a slowdown at this time of year.

Asking price averages have also fallen because there are now more smaller, lower prices properties coming onto the market rather than larger, more expensive properties, state experts. There was an average fall in asking prices of 6.8% in the London area according to figures, and this has also been partly blamed on the level of smaller properties coming on the market rather than larger houses and apartments.

One Right Move expert stated that over the coming year house prices are more likely to stagnate than actually crash. He also said: “New listings are low at this time of year so the artificial wave of ‘low-end’ sellers has really distorted the average prices of properties new to the market.”

Recent Additions:

• 100% mortgage customers should watch out for negative equity
• Homeowners are not as well off as tenants
• Increasing number of first time buyers look to brokers for assistance
• Gazundering becoming more commonplace
• Unions angry over insurance job cuts

Tags: property price, mortgage, Economy of the Republic of Ireland, uk, first time buyer, United States housing bubble, housing market, evidence

100% mortgage customers should watch out for negative equity

Over recent years the number of 100% mortgages being taken out has risen, with fewer and fewer first time buyers able to afford to raise the deposit to purchase a property because of the cost of properties in the UK at present. Many lenders will not offer 100% mortgages to applicants because of the risks involved, but there are still many lenders that do offer 100% mortgages to first time buyers, and many first time buyers have taken these to enable them to purchase a property without the need to have a deposit available.

However, some experts have warned that consumers that are now thinking of taking out a 100% mortgage need to consider the risk of falling into negative equity. House prices in the UK have already fallen unexpectedly in September 2007, and experts have warned that the fall in property values could continue over the course of the year. This means that those taking out 100% mortgages now could soon find that they are actually in negative equity if house prices do continue to fall as predicted.

One industry professional stated: ‘There are indications that the house price boom is slowing, so anyone taking out a 100% mortgage is risking being stuck in negative equity. And if you add hefty fees to your mortgage, the risk is increased.’ Negative equity is where you end up owing more on your property than the actual value of the property.

In the past six months alone the number of 100% mortgage deals has increased from 92 to 160. Many of those that have recently taken out 100% mortgages may already have found that they are slipping into negative equity following the September 2007 price fall.

Recent Additions:

• Homeowners are not as well off as tenants
• Increasing number of first time buyers look to brokers for assistance
• Gazundering becoming more commonplace
• Unions angry over insurance job cuts
• Watchdog to probe sale and rent back

Tags: time buyers, first time buyer, boom, year, 100% mortgage, hefty fees, watchdog, experts

First-time buyers face bigger deposits

First-time buyers are now having to stump up bigger deposits than before to buy their first home, even though property prices have been falling in recent months, it has been reported. Read more

Tags: property, first time buyers, mortgage deposits, first time buyer, belts, home

First-time buyers “struggling” to get mortgages

People looking to secure funding to get onto the property ladder are more likely to have difficulties than those in more established jobs and who have bigger deposits to put down, according to Cobalt Capital partner Andrew Montlake. Read more

Tags: first time buyers, lenders, Association of Mortgage Intermediaries, Mortgages, credit problems

The ‘bulk’ of mortgage lending will be re-mortgaging

With fewer people applying for mortgages for new homes, an expert has predicted that the “bulk” of this year’s mortgage lending will be in the re-mortgaging area. Read more

Tags: Financial Services Authority, Business Finance, Pauline McCallion, year's mortgage lending, The

Up to half of under-30s ‘aim to buy homes’

Around 50 per cent of young people in the UK regard buying a home as a realistic goal for them before they reach 30, new research has shown.

Findings from Alliance & Leicester reveal that the timing of achieving this milestone is pertinent with the average age of a first-time buyer being 29, a figure which has risen from 28 in the early 1990s.

Richard Taylor, head of mortgage products at Alliance & Leicester, said that reaching 30 is milestone for many as it is a deadline for certain ‘achievements’ such as owning a property, getting married or starting a family.

“Even in an uncertain housing market we’re seeing those under the age of 30 feeling confident and optimistic about the prospect of getting onto the property ladder before they say goodbye to their twenties,” he continued.

Renting is the option for those living away from home before attempting to climb the property ladder says the research.

Meanwhile, young people are being urged to should begin their savings “in the cradle” by savings experts with the Scottish Widows.

Tags: first time buyer, age, option, mortgage products, property ladder

Lenders to start withdrawing 100% mortgage deals

Following the withdrawal of 125 per cent mortgage deals, many lenders are beginning to remove 100 per cent deals too, one finance expert has claimed.

Moneyfacts.co.uk has said that 100 per cent mortgage deals are becoming expensive and harder to find, and this is a market trend which will affect first-time buyers the most.

Since November almost one third of lenders offering the rate have withdrawn their products from the market, leaving only 28 providers.

Julia Harris analyst at moneyfacts.co.uk, said: “This is yet another example of lenders continuing to tighten their belts even further in what has become a vastly different mortgage market from this time last year.”

Those who are looking to get on the first rung of the property ladder will find there are fewer options without a deposit.

First-time buyers could have to pay a larger premium for the added risk that the lender is taking on, he added.

Meanwhile, the Council of Mortgage Lenders has reported that while gross lending held up well in January, there is still “considerable uncertainty in the housing market” at present.

Tags: example, lenders, rate, first time buyer, moneyfacts, different mortgage market, market trend, larger premium

Negative equity from 110 per cent mortgages

So-called ‘110 per cent’ mortgages, which do not require an initial deposit from holders, are becoming an increasingly popular option among home buyers, with house prices in the UK growing fast.

First-time buyers in particular, who tend to be younger and have little or no savings, find them particularly appealing.

However, industry experts, including those at Baronworth Investment Services, counsel against seeing taking out such a mortgage as a risk-free endeavour.

Michael Brill, a director at the company, said that the ideal 110 per cent buyer was “The young professional… who hasn’t got a deposit and knows they are going to have a nice increase in salary in a couple of years time.”

However, he warned that “if we have a crash in property with a negative equity from a 110 per cent mortgage”, holders “could end up with further negative equity.

“That is one of the big disadvantages”, Mr Brill surmised.

The Council of Mortgage Lenders (CML) recently revealed that the proportion of first-time buyers in the UK rose from 48 per cent to 56 per cent in 2006.

Tags: salary, couple, proportion, Economic history, first time buyer

FTBs saving longer for their deposits

First-time buyers (FTBs) are saving for “around five years” to put down a deposit for their home, Your Mortgage said yesterday.

FTBs are also relying on loans from parents more and more, as house prices increase and interest rates rise.

Editor of Your Mortgage Paula John said that the average savings time had increased by a full 11 months in the past year alone.

“Of course, in the light of recent interest rate increases houses are even less affordable for first-time buyers so they are being kicked out of the market altogether”, she said.

Ms John also stated that house prices in London, which have increased by 15 per cent on average in the last year alone, have led FTBs to “lower their sights” and “buy a lot further out”.

According to HousePriceCrash.co.uk, in the last decade numbers of FTBs have shrunk from 55 to 29 per cent of the market.

The Office of National Statistics has also stated that the average price paid by FTBs in the UK has risen by 204 per cent over the same period.

Tags: first time buyer, average savings time, Real estate economics, Ms John, market

Brits emotionally detached from their homes

The majority of British homeowners are not living in their dream home and remain emotionally detached from their property.

Research by Alliance & Leicester shows that just 2.3 million UK adults have found their dream property, while the rest are simply making do.

Mortgage holders were asked, on a scale of one to ten, how emotionally attached they were to their homes, with the average rating being just 5.83.

This means that most Brits see their current home as a halfway house and most would rather live somewhere else.

Alliance & Leicester suggests that this may be down to the fact that many people are so desperate to get onto the property ladder that they will accept anything.

The firm also points to an increasing number of new-build flats that lack character and are primarily seen as an investment by young buyers.

“It seems people are happy to move into a property that isn’t their ideal, in order to move up the property ladder and reap the benefit of rising house prices,” said Stephen Leonard, director of mortgages at Alliance & Leicester.

“More and more people seem to be looking for property on the basis of an investment, rather than buying their dream home.”

The research also found that location is the most important factor when choosing a home, followed by price.

Tags: Mortgage loan, house prices, rest, property, benefit, first time buyer, Stephen Leonard, basis

Uni sacrificed for mortgage

The difficulties associated with getting onto the property ladder are forcing many youngsters to abandon their education.

New research shows that ten per cent of 18-24 year olds are choosing not to go to university so that they can save some money towards their first home.

With house prices seemingly on an endless upward curve, it is now more difficult than ever to purchase a first home and the costs of university are an unwanted burden for many.

Lloyds TSB carried out the research which highlighted that many youngsters are making big sacrifices in order to get a mortgage.

One in five say that they have abandoned the dream of forging a career in their preferred sector, opting instead for a better paid job that they do not enjoy.

In addition, a further one in six say that they are doing two jobs to save some money, while 54 per cent are living at home indefinitely.

“The fact people are willing to forgo their education highlights the importance of homeownership to the younger generation,” said Alison Burns from Lloyds TSB. “However, these extreme measures may not always be necessary, as the research shows a number of misconceptions about the modern housing market.

“Almost 65 per cent of those we spoke to believe a ten per cent deposit is an essential requirement but this is not the case. Mortgage providers are becoming increasingly flexible to accommodate the changing circumstances of first time buyers.”

Tags: deposit, first time buyer, year, Alison Burns, addition, house, modern housing market."Almost, percentage

Buy-to-let harming first-time buyer chances

First-time buyers are losing out due to the growing buy-to-let market, according to Firstrung, a mortgage company specialising in first-time buyer deals.

In their estimation, up to one million properties have been lost to the first-time buyer market because of buy-to-let purchasers, and the competition between the markets has resulted in £50,000 price rises over the last four years.

Firstrung released their statement in response to a comment by Professor Michael Ball of the University of Reading at a conference held by the Association of Residential Letting Agents (Arla).

In his speech to the Arla annual conference on February 7th, Professor Ball “dismissed” the idea that buy-to-let investors force first-time buyers out of the market, and said: “Buy-to-let has increased the size of the private rented sector and extended the alternatives to both owner-occupation and social housing.

“It has assisted in the regeneration of inner city neighbourhoods and in some areas it has helped to revive the housing market.”

Responding to the comments, Paul Holmes, operations director of Firstrung issued some stinging criticism.

“In recent years amateur buy-to-let investors have had a more detrimental effect on first-time buyer opportunities than any other purchaser,” he said.

“First-time buyers would be looking at average prices circa £100,000 to get on the first-rung, as opposed to the average entry level price of £150,000, if buy-to-let had not taken such a grip of the imagination of the British public.”

Tags: first-time buyer opportunities, Professor Michael Ball, Residential, buy-to-let, first time buyer, detrimental effect, Business Finance

Fixed-rate mortgage fees rising

Mortgage lenders are raising their application fees for fixed-rate mortgages, as the products become more and more popular.

With interest rates currently standing at 5.25 per cent and fears among many that future rises are imminent, first-time buyers are fearful of taking out variable rate mortgages.

However, as lenders have recognised the growing trend, they have begun increasing application fees, according to MoneyExpert.com.

The average application fee has risen by 18.5 per cent since last August, with products that have a fee of at least £750 also becoming much more common.

“Homeowners are desperate to fix their mortgage rates to avoid incurring further costs caused by rising interest rates,” said Sean Gardner from the website.

“It’s the sensible option, as further rises aren’t out of the question.”

People considering taking out a mortgage, particularly first-time buyers, may find that a fixed-rate is the best option for them.

However, it is recommended that you shop around to find the best mortgage to suit your circumstances and ensure that you can realistically afford to pay the application fee.

Tags: Business Finance, homeowners, application fee, option, trend, first time buyer, fee

First-time buyers paying £150k

Tags: buyer, First-time, time, buyers paying £150k, Supplies and Equipment, first time buyer, Business Services