First time buyers face challenges in today’s mortgage market. But according to the Halifax, there are plus points as well. In particular, a combination of lower interest rates and falling house prices means that mortgages are far more affordable than they were a few years ago. Many have also been able to take advantage of the exemption from stamp duty.
According to the Halifax, average repayments have nearly halved over the past three years. The typical first time buyer now spends only 28% of their income on monthly mortgage payments – as against 50% at the height of the boom in June 2007.
Of course, that’s not the whole story. The big task facing first time buyers is to save a large enough deposit to satisfy today’s cautious lenders. The Halifax calculates that first time buyers put down more than £30,000 on average (an amount equivalent to some 22% of their home’s value). So it’s hardly surprising that help from parents, the so-called ‘Bank of Mum and Dad’, has been such a talking point recently. However, there are some attractive, higher-loan-to-value deals available.
And although the numbers remain well below those seen before the credit crunch, the first six months of 2010 saw 28% more people gaining a foothold on the housing ladder than in the same period last year.
Tags: Headlines, Housing Market, Industry
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