UK First Time Buyers Face Uphill Battle to First Residence
First time buyers are facing a bevy of challenges as they search for a residence to call home, according to the latest research to surface. Am Trust and Moneyfacts have noted there has been a rise in cost of first time homes and rents are now topping more than £1,000 per month. Lenders are also making it more challenging by reducing the number of low deposit type mortgages available for first time buyers.
The average cost of a home for a first time buyer has now increased to almost £170,000. This figure imposes new challenges both in purchasing power of a new buyer as well as the options on renting as well. Lenders at the same time are lowering the number of mortgages for low deposits. Rent now has entered a new realm and is nearing the £1,000 per month arena.
Mortgage lending at such a high Loan to Value amount is decreasing this year as well. In Q1 of this year 95% LTV loans made up only 2.5% of total lending. This is more than 3.5% lower during the same quarter year on year.
Simon Crone, of mortgage risk specialist AmTrust International, commented on the latest figures regarding first time buyers, saying: “These findings are a further worrying indication of decline, particularly concerning for first-time buyers who are typically unable to save large deposit sums and rely on high LTV lending.”
Crone added: “It also suggests that while lenders have appetite for lending in general, they are more focused on lending to those customers with larger deposits.”