First Time Buyers Flood the Market
2 minute read
You may have read about tough lending criteria, rising interest rates, huge deposits and increasingly pricey first homes in recent months, but against the odds more first time buyers are shacking up in the UK than the country has seen since the economic downturn.
In August 2014 more mortgages were agreed with first time buyers in a single month than the market has recorded since before the credit crunch hit in August 2007. This is the first time in 7 years that lending to first timers has broached the 30,000 mark.
A return to form
In previous years this monthly mortgage level has dipped far, far lower, reaching an all time low of just 8,000 first time buyer approvals in January 2009. According to the Council of Mortgage Lenders, this buoyant first time buyer market is a positive sign of a recovering economy.
Why the rise?
There are a number of factors behind this apparent return to pre-credit crunch form. The Help to Buy scheme, aimed specifically at first timers, is undoubtedly a huge player, giving young people the confidence and the financial assistance they need to get onto the first rung of the ladder.
Another major player has been improved access to finance (again, supported by Help to Buy – and a less stressed economy). Although mortgage lenders are becoming more vigilant about who they lend to and performing ever more rigorous affordability checks, lending is shooting up. In fact, this year saw the average size of loans rise to £127,500 in July – an all time high.
Interest rates remain low – for now
Lower interest rates are one more piece in the puzzle which has the UK’s first time buyers finally getting their very own front door keys. A healthier economy has allowed interest rates to drop, but many experts are warning of an imminent rise from the current low of 0.5%. This means that all first time buyers taking on large loans need to be extremely vigilant and should consider fixed rate options wherever available.
While first time buyers across the UK start climbing the property ladder, many individuals with a less-than-perfect credit report dream of doing the same. If you’re ready to become a property owner but have black marks in your way, ask our experienced team about the possibilities presented by specialist bad credit mortgages today on freephone 0800 9777840.