by Mark Johnston
First Time Buyers Have Still Bought Despite Challenges!
Most first time buyers have faced many different challenges than those who bought their homes just 5 years ago.
Since the credit crunch began first time buyers have seen challenges from mortgage rationing, high deposit demands, fluctuating housse prices and also the end of the stamp duty concession.
Recent research has shown that people know it is more difficult to achieve home ownership than it used to be, and that renting is likely to be a tenure in which most new households will spend at least some time.
A new report from the Yorkshire Building Society (YBS) has confirmed just how hard it is for first time buyers to get on to the property ladder. The report found that prospective first time buyers are saving, on average, £248 per month, towards their first house deposit.
Joanna Elson, Chief Executive of Money Advice Trust (MAT), said: “It is clearly difficult for people to save the money for a deposit to buy a house and this has led to more people remaining in the renting market for longer.”
However it seems that aspiring first time buyers have risen to the challenges that they have and are facing.
According to the Council of Mortgage Lenders (CML) one million households have become first-time buyers since the onset of the economic downturn, which accounts for 1 in 10 mortgage borrowers.
Martijn Van der Heijden, head of mortgages at HSBC, flagged up the fact that first-time buyers are still managing to get onto the property ladder, despite the muted mortgage market.
There are of course some advantages to being a first time buyer in the current climate, interest rates are historically low and many sellers prefer first time buyers as they are not in a chain.
Along with this when it come to finding a mortgage today’s generation of first time buyers have significantly more information available to them than their parents did.
Colette Best, mortgage policy adviser at the Building Societies Association (BSA), stated “while today’s first time buyers will probably have to put in a bit more time to arrange a mortgage than their equivalents would have done 5 years ago. It is certainly quite possible for first time buyers to get on to the property ladder”.
However, industry experts believe that lenders still have further work to do to develop a relationship of trust with their existing borrowers and with the borrowers of the future, many of whom, rightly or wrongly, see lenders as the cause of problems rather than the providers of solutions.
So despite all the challenges and the doom and gloom first time have to face and have already faced it is surprising that they still believe their first home is just the first rung on the property and not the only property that they will buy during their lifetimes. In fact many first time buyers anticipate that they will buy at least another 2 properties.
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