Monday, November 15, 2010
Category:
Property
According to moneysupermarket.com, ‘things are looking up for first time buyers’. The comparison site has revealed that since the beginning of the year there has been a 22 percent rise in the number of products available to this group of buyers. What’s more, the number of mortgages on offer at 80 percent loan to value (LTV) has reportedly risen by 76 percent since January.
It has also been revealed that since January the average rate for 90 percent LTV products has fallen by 0.33 percent to 5.82 percent. In addition, the average rate for loans up to 85 percent LTV has dropped by 0.96 percent to 5.02 percent. Consequently, moneysupermarket.com has pointed out that a first time buyer with a mortgage of £150,000 at 85 percent LTV will have seen their monthly repayments fall from £964.62 in January to £878.63.
However, findings have shown a 0.2 percent increase in the average rate for 95 percent mortgages and only a small rise in the number of 85, 90 and 95 percent LTV products on offer. For these reasons it is believed that many prospective first time buyers are continuing to struggle to secure a place on the property ladder.
Site editor of moneysupermarket.com, Clare Francis, commented: "It's encouraging to see the number of mortgages available for those with reasonably small deposits increasing, but there is still a premium on rates for loans available up to 90 per cent discouraging many first time buyers. The best rates are still only available to those large deposits – you need at least 25 per cent and in some cases 40 per cent to qualify and this is pricing many out of the market.
"First time buyers are integral to keeping the housing market moving – if there aren't enough people jumping on at the bottom the market will eventually grind to a halt. A shortage of first time buyers is evident around the country with many people struggling to sell their properties. Unless more lenders start offering 90 per cent mortgages at affordable rates, it is difficult to see how this will be resolved. Increased competition would also help to push rates down, bringing the cost of mortgages available at high LTVs closer to the market-leading deals.
"Despite Base Rate having been left on hold at 0.5 per cent again this month, an increasing number of economists believe interest rates will start rising sooner rather than later. Anyone thinking of buying for the first time may therefore be better off acting sooner rather than later as mortgages rates are likely to go up too. The housing market is also fairly subdued at the moment as the build up to Christmas starts, so it could be a good time to buy as sellers may be more than willing to negotiate on price."
……………………………………………………………………………………………….....
First time buyers who would like to carry out work on their new property, and who are looking for funds to do so, could consider taking out a
secured loan. One of many finance options available, a secured loan for home improvements could facilitate any repairs that may be necessary for example. What’s more, borrowers may wish to completely re-decorate their house to turn it into their ideal home.
