Mortgage Advice for First Time Buyers, First Time Buyer Mortgages and First Mortgage Advice

New findings highlight challenges ahead for first time buyers

12-May-2014

A number of recent news stories have highlighted the recent challenges facing first time buyers.

For example, recent findings by Moneysupermarket.com revealed that stamp duty costs are adding to the cost burden of many first time.

It showed that three-quarters of people saving for a deposit to buy a house in the UK said that stamp duty is holding them back.

Furthermore, its figures revealed that over half, (57 per cent) of those polled claim they need to save for longer than planned to cover stamp duty fees, while a further 20 per cent will rely on someone else to help meet stamp duty costs.

Commenting on the findings, Clare Francis, editor-in-chief at MoneySuperMarket, said that, although government schemes have helped to reduce the deposit requirements that many first time buyers have to pay, this is still not enough.

She added: "Despite the barriers, it is good to see so many people saving towards their first home and those who can manage to scrape together a ten per cent deposit will find they are able to get their hands on some competitive deals. Buyers mustn’t be led by the interest rate alone though when comparing mortgages."

In fact, the cost of a deposit may be significantly higher once stamp duty is taken into account. The findings revealed that the average deposit potential home buyers currently have saved is £9,734.

However, with the average UK house price of £183,577, this works out to be less than five per cent of the deposit once the one per cent stamp duty cost of £1,835.77 has been taken into consideration.

At the same time, a number of experts have also warned that the new Mortgage Market Review (MMR), which came into force this year, could result in many poorer households and first time buyers being unable to obtain a mortgage.

Property firm Savills said that if first time buyers are unable to save enough money towards a deposit, or get a more affordable mortgage, then more people will choose to rent.

Lucian Cook, head of residential research at Savills, explained: "The MMR rules will further the erosion of mortgaged home ownership that has been occurring since the turn of the millennium. It is likely to require households to rent for longer and enter home ownership later, once they have accumulated a deposit or received a slug of equity from older generations so that they can meet mortgage criteria."

According to Savills, in 2001 the number of households renting in the UK has broadly doubled to 4.8 million and a further one million will join them in the next five years.
Article Options:

Email this article to a friend

Get updates from our RSS Feed

Post this article to:

del.icio.us

Digg

Reddit

2014: Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2013: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2012: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2011: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2010: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2009: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2008: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2007: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2006: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar | Feb | Jan

2005: Dec | Nov | Oct | Sep | Aug | Jul | Jun | May | Apr | Mar


Free e-Bulletin

News and Offers for First Time Buyers

Register

There's alot going on! What do you think?

Interest rates are low but could rise? Is this a good time to buy?

Yes
No

Varialbe rate mortgages go up if bank interest rates do. Which is your preference?

Fixed Rate
Variable rate

Interest only mortgages are cheaper but in the end you don't end up owning the property. Which is better?

Interest Only
Repayment

House prices are waivering. Do you think this is a good time to buy?

Yes
No

Shared equity mortgages allow you to buy a new home with 5% deposit and an equity loan through FirstBuy. What do you think?

Too complicated
Too expensive
Too risky

Rent to buy allows you to peg a property price, save towards a deposit and pay reduced rent. What do you think?

Works best in a rising market
Too complicated
Good option


 

You Tube
Mortgage Advice for First Time Buyers