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Posts Tagged ‘Property ladder’

Mortgage difficulties lead to frantic rental sector

Tuesday, March 29th, 2011

For many first time buyers getting onto the property ladder has become increasingly difficult due to a range of factors, including high deposit demands, high asking prices, and restrictions from lenders. This has led to the demand for rented property soaring, with many people trying to get their hands on the same property. This has led to the property rental market becoming more frantic than ever, leading to increased difficulties for those trying to rent a home.

It is claimed that the process of gazumping, which was once very common in the purchased property market, has now shifted to the property rental market, which means that would be tenants have a stressful and difficult time ahead of them when it comes to securing their ideal property. In a bid to try and get their hands on a rental home in the current market potential tenants are frantically trying to outbid one another with regards to the amount of rent they are willing to pay each month.

With rents already rising fast in many parts of the UK, this process is pushing up costs even further for many people that are hoping to rent, and many are losing the properties that they are interested in because they are being outbid by other tenants. Figures have also showed that properties are now taking around fifteen days to be snapped up after being marketed for rent, which is five days faster than they were taking a year ago.

One industry expert said: ‘Lack of mortgage funding and high house prices are locking many people out of buying. The knock-on effect is that rental demand has soared, with prices rising rapidly. In the past it was rare for gazumping to happen in the rental market, but in this sort of environment it is going to occur more.’

Tags: Leasehold estate, Mortgage difficulties, Gazumping, Property ladder, property, rental market, first time buyer

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Why are so many people continuing to rent?

Wednesday, September 22nd, 2010

These days there are many people in the UK who are renting a home rather than deciding to buy their own property, and whilst this is damaging for the property market in the UK there are a number of reasons why many non-homeowners are continuing to rent and are not getting onto the property ladder.

The fact that so many people are now deciding to rent has pushed up the average rent in the UK over recent months, and this has been coupled with the fact that a rising number of landlords have been selling up, resulting in lower supply of rental properties and higher demand.

The mortgage market has been difficult for some time, with many people unable to access affordable mortgages, and this is particularly true for first time buyers who may have wanted to get onto the property ladder but have been unable to get the necessary finance from lenders.

Another of the reasons that many people are not buying property at the moment is because they cannot afford the deposit that is needed to get a mortgage from most lenders, as this has soared over the past couple of years with many demanding a minimum deposit of at least 15 to 20 percent of the property value in order to offer a mortgage.

For many the financial climate and economic fragility simply isn’t stable enough for them to make such a huge commitment as purchasing a property, and this is yet another reason behind the rising number of non-homeowners that are deciding to rent rather than try and get onto the property ladder. Whilst the recession may be officially over many are still in fear of losing hours at work or even losing their jobs, with the coalition government’s cutbacks in the public sector likely to produce job losses both in the public and private sectors, and this has made many too wary of committing to something as huge as a mortgage loan.

The good news is that whilst the lack of buyers in the property market may be driving up rental prices due to increased demand the same situation is also helping to drive down the cost of purchasing a property because of the lack of demand amongst buyers coupled with an increase in people trying to sell their homes, and recent reports have indicated that asking prices have now fallen for the third consecutive month, which is good news for those that do decide to buy.

Tags: mortgage, Mortgage loan, first time buyer, Renting, Property ladder

Posted in Featured Articles, Mortgage News | 1 Comment »

How do shared ownership mortgages work?

Wednesday, September 8th, 2010

Shared ownership is an option that is now being considered by many first time buyers looking to get onto the property ladder. Buying a property outright in the traditional way has become impossible for many first time buyers, and this is due to factors such as mortgage restrictions, high deposit demands, and high house prices, all of which have affected buyers’ ability to get the mortgage that they need.

Shared ownership is a scheme that has given first time buyers a chance to get onto the property ladder gradually, and for many is the ideal solution because there is no huge deposit or mortgage required as there may be when buying 100 percent of a property. With shared ownership buyers only have to take out a mortgage for part of the property value depending on the share that they are buying, which means that the repayments are more affordable, the likelihood of getting the mortgage is higher, and the deposit is not as much as it would be with a fully mortgage.

It is worth bearing in mind that not all lenders offer shared ownership mortgages, so you will need to do a little research to find out which ones are able to help. Shared ownership properties are dealt with by housing associations, so you may be able to get advice from the housing association that you are going through with regards to mortgage lenders that may be able to help.

Over the past few years lenders have placed strict restrictions on their mortgage lending, and whilst prior to the credit crisis lenders were offering multiples of up to five times the borrower’s salary this has all changed now, making it difficult for buyers to get the amount they need to buy a home in the traditional way. In addition lenders want far higher deposits, such as 20 or 25 percent of the property value, and this is something that is impossible for many to raise.

With a shared ownership mortgage buyers may be buying a 25 or 50 percent share of the property for example, which means that they only need a mortgage for the percentage of the property that they are buying. The remainder of the home is rented from the housing association, but as and when the buyer is able to afford to buy more of the property it is possible to staircase and take on a larger share until the buyer has purchased 100 percent of the home.

Tags: first time buyer, mortgage, Property ladder, Mortgage loan

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Good news for first time buyers when it comes to house prices

Thursday, August 5th, 2010

One industry expert has recently stated that the recent fall in house prices in parts of the UK will come as good news for first time buyers, many of whom have been disappointed that property prices have been rising again over recent months, putting home ownership even further out of their reach.

Paul Holmes from property company Firstrung said that the country’s first time buyers would welcome the fact that house prices had fallen again recently, but he added that there was still a long way to go for first time buyers in terms of the price of property and the amount that they could actually afford.

For many first time buyers getting a mortgage is already a difficult enough task but with the price of property still high in the UK compared to many other countries many simply could not get a mortgage for the amount that they required. For many the deposit was still a huge issue, with many lenders still demanding deposits of 25 percent or more.

During the month of July asking prices in the UK fell for the first time this year according to the property website Right Move, and this resulted from an influx of sellers onto the market compared to a smaller number of would be buyers due to the problems that many buyers are experiencing in getting a mortgage.

One first time buyer explained the difficulties that she had been facing in trying to get onto the property ladder in the current climate, stating: “Although house prices are said to have fallen recently, which is good news for people like me, the price of property in England is still way too high, and with the higher deposits that lenders want buying is still out of the question for me.”

Tags: Mortgage loan, mortgage, first time buyer, house prices, Property ladder

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Can first time buyers get an affordable mortgage?

Saturday, June 26th, 2010

Over the past couple of years there is no doubt that things have been very difficult for first time buyers, and for many their dreams of homeownership have been dashed due to high deposit demands, stricter lending criteria, and higher interest rates charged to certain groups such as first time buyers.

However, although there have been extreme difficulties over the past couple of years when it comes to purchasing a home as a first time buyers the market is said to have eased up over the past couple of months, and this could mean that first time buyers won’t have such a tough time getting the mortgage that they need.

So, is it actually easier now for first time buyers to get a mortgage than it was say twelve months ago? Well, in actual fact the mortgage market has eased up to some degree, and there are now more mortgages available that are suited to first time buyers and even aimed at first time buyers, which is great news for those that want to get onto the property ladder.

However, things are nowhere near as easy as they were in the past. Just a few years ago first time buyers could get mortgages for 100 percent of the property and even for 125 percent of the property value, but this has now all changed. These days first time buyers would be lucky to find a mortgage for 95 percent of the property value, which just a few years ago was the norm.

The number of lenders offering 90 percent mortgages for first time buyers has increased, and this is good news for those hoping to get onto the property ladder as it means having to raise less of a deposit, although buyers may still have to stump up a substantial amount to be able to put down the necessary deposit, which can be a problem given that first time buyers have no previous property from which to take equity.

Another thing that could stand between potential first time buyers and home ownership is the fact that property prices are still quite high, and therefore many cannot get the level of mortgage that they need. A way around this is to look at scheme such as shared ownership or Homebuy Direct, which are schemes that make it easier and more affordable for first time buyers to get onto the property ladder.

Tags: finance, Property ladder, Mortgage loan, mortgage, first time buyer