Easier for First Time Buyers to get a Property
New figures this week show that mortgage lending for first time buyers achieved a 7 year high during 2014. What's interesting is that historically it has always been tougher for first time buyers to get their first property when compared to those who already own a house but these new figures show that for the first time in decades, first time buyers are able to more easily attain their mortgage than existing home owners.
The Government Scheme has Helped
It appears that the Government's Help to Buy scheme has been successful in making it more possible to buy your own house. Many first time buyers have been reaching out to take advantage of this pot of cash that inevitably has limited funds and is predicted to run out within the next couple of years. The Help to Buy Scheme has allowed many new buyers to put down a relatively small deposit which is often at 95% Loan to Value.
First Time Buyers are getting Older
Even though last year showed a significant increase of 15% more sales when compared to 2014, there are underlying factors that show that getting on the property ladder isn't as easy as it was for previous generations. In the early 90's around 70% of first time buyers where between the age of 24-34 nowadays this figure stands at around 40% for the same age group. What's surprising is that the age cap set by the banks on being able to attain a mortgage currently stands at around 46 years old. Typically a mortgage term lasts 20 years so banks are cautious of lending to those older than this just in-case they don't live the term of their mortgage. For those older than this age bracket they will have to take out a mortgage with a shorter term, however this will obviously mean higher monthly repayments.
What does this mean for 2015
The problem with these figures is that they are historical and admittedly 2014 was a great year for the property market but 2015 has gotten off to a slow start and many analysts have predicted that house prices are going to remain pretty stagnant for the remainder of the year. This is still yet to be proven and typically the housing market has always proven to pretty stagnant during the first quarter of each year.