Before the credit crisis that crept in 2008/2009 the number of first time UK mortgage borrowers was in millions.A large range of mortgage lenders competed aggressively for first time buyer mortgage business, in the hope that once someone takes out a first time buyer mortgage, they may remain as a customer for many years.The total UK mortgage market is influenced by the first time buyers.To maintain the momentum of sales further up the property ladder, there must be a flow of first time buyers moving onto the bottom of the ladder to keep the cycle going.It is no coincidence that now first time buyer activity has decreased, house prices have stagnated or even started to fall in many areas of the UK.
It was possible to obtain first time buyer mortgages prior to the credit crunch, with little or no deposit.Actually in the before periods ranging from 2005 to 2007 there was a 100% mortgage lending that was provided where the customer need not have to pay anything to take the mortgage.At this time the lender were more particular about numbers and not about the quality of the loans being given as they were willing to risk with the high value loans.This does not mean that UK mortgage lending was done relentlessly as the observations show that for the pat 24 months the loans that were issued were at an acceptable rate. Nevertheless the interest rates have been at the least for the past so many years and if only the rates tend to change on the upper side then people will have a terrible time to repay them.
The major issue faced by many of the first time buyers at the moment is that of a more tougher lending norms and deposit necessity.100% mortgages are no more and do not look set to return any time soon – if ever.Right now the first time buyers have to put in an initial deposit of 10% of the value of the property. However, the more attractive lower cost mortgage deals require as much as 25% deposits.Now the mortgage lenders have more stringent norms what with them giving the loans to first time buyers having a good credit history and an appropriate underwriting profile as well .
So what will happen to the first time buyers?. There has to be a change someday.The financial crisis is now having a very negative impact on the availability of first time buyers as well as the mortgage market in the UK.It will be so very hard when the earlier times of 100% mortgage terms come back.In order to bring in a stability to the home loan market it is advised that that there are prudent measures that are brought forth in the next 24 months to help the first time buyers as well.
Lets hope that the UK mortgage market sees sense and starts to offer strong prospective first time buyers a fair deal so that buying a first property becomes more achievable for more would be first time buyers. It is necessary to find First Time Buyer Mortgages and also get more Mortgage Advice from experts.
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