Potential House Buyers Forced To ‘Lower Their Sights’
Keywords: first, time, buyers, struggling, having, wait, five, years, property, price
Prospective first-time buyers in London are struggling even more to get into the housing market, an industry expert has claimed.
According to Paula John, editor of Your Mortgage, consumers in the capital are having to wait an average of five years before they are able to save up enough cash to purchase their first home - a rise of some 11 months from a study conducted last year. Consequently, Ms John reported that due to the increased amount of time it takes to put money away to meet property deposits and secured loan costs, combined with recent interest rate rises by the Bank of England, “houses are even less affordable for first-time buyers so they are being kicked out of the market altogether”.
As a result those looking to buy a house across the country, but in particular London, are now being forced to “lower their sights” just so that they can get on to the property ladder. This has been said to lead to Britons being forced to accept that they are probably unable to afford the type of property they would like or in the area they would wish to live in. Consumers were also reported to be increasingly buying homes with friends, family members or partners in an attempt to afford increasing mortgage costs as they look to be “creative” on entering the housing sector.
The editor also reported that a number of parents could risk getting themselves into monetary difficulties in an attempt to help their children get their first home, as about half of prospective first-time buyers look to their families for financial aid. “Parents are giving up their savings and hard earned cash, even remortgaging and releasing equity from their own property in order to give it to their children to help them on to the property ladder” she commented.
Meanwhile, those thinking about opting for 100 and 110 per cent mortgages were advised to do so with “consideration”. Ms John claimed that although they can be helpful for some borrowers, overall she advised “they’re never ideal and they’re never charged at the very lowest rate on the market for obvious reasons. They can be useful if you absolutely have to get on the ladder now but you’ve got to pay the price for the convenience”.
Earlier today, figures released by the Land Registry indicated that despite property prices across the country having increasing over the course of June (0.4 per cent) this rate of growth was almost half of that recorded during the previous month (0.7 per cent). Overall, the average home was now reported to cost 181,039 pounds - a rise of 9.1 per cent from the same period in 2006. London was reported to have driven growth during the course of the month, as homes in the capital rose by 1.5 per cent to a typical value of 338,950 pounds.
During the last 12 months, the city was said to have seen an increase of 15.8 per cent. Meanwhile, the West Midlands witnessed the second highest price rises over June as they rose by 1.2 per cent. However, only half of the regions surveyed saw house costs rise with the remainder posting decreases - which were particularly driven by Wales (-1.1 per cent) and the East Midlands (-0.6 per cent).
Tom Dawson is the Editor in Chief for Essentially Home Loans where visitors can apply for cheap loans online. We also specialise in debt consolidation loans, and secured loans. Visit our site today news.essentiallyhomeloans.co.uk
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