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UK first-time house buyers feeling over stretched
By Michael Hanna
The population of Britain is renowned across Europe as a nation of fanatical home owners. While members of other countries are content to rent their home rather than take on the burden of actual ownership and long-term financial debt, people in the UK seem fixated with the idea of buying and owning their home.
Unfortunately for the thousands of current prospective first-time home buyers, the soaring levels of house prices in recent years has made it increasingly difficult to get into the first rung of the property ladder. As the value of houses at all levels increases, the number of first-time buyers who are having to borrow the full value or more of their property, or rely on more financially secure friends and relatives to stand any chance of buying a home, has also increased.
According to a recent report by the Post Office, there are currently many first-time buyers who have become so overstretched through their borrowing that they now stand the risk of losing their homes within the next six months.
According to Claire Oldstein from the Post Office: "First-time buyers tend to overstretch themselves, but need to consider what they would do if they lost their income.
"One in three first-time buyers accepts that their household costs are higher than they had anticipated and 45 per cent do not have any insurance against loss of income resulting from accident, sickness of unemployment."
While the major mortgage lenders like the Woolwich mortgages, understand that the introduction of first-time buyers is essential to keep the housing market from becoming stagnant, making it essential that many first-time buyer mortgages include incentives such as introductory reduced fixed rate interest periods, to help buyers regain their secure financial footing, this does not address the fundamental problem of increased borrowing.
First-time buyers are becoming more wary over the disparity between wages and the size of the debts accrued through taking out long-term mortgage loans. A study by the National Association of Estate Agents, indicated that only 12% of all houses sold last year were bought by first-timers, compared with nearly a third in 2000.
Mortgage comparison services like Moneynet and special introductory rates can help to ensure buyers get a better deal, but as the average length of time take to save up the deposit for a new house increases, and with it the average age of all first-time buyers, it is evident that the burden being felt is starting to weigh heavily on the already financially stretched resources of young house hunters.
Claire Oldstein warned that, "It's unlikely they will have a big enough rainy day fund to rely on especially after pulling together a deposit. Protecting yourself may seem another unwelcome expense but it could actually be money well spent should the unexpected happen."
About the Author
Submitted by:
Michael Hanna
About Michael
Michael is a keen writer, and internet marketer living in Scotland:
Contact details:
E-mail: samqam@googlemail.com
Phone: 0131 561 2251
Michael's Website: Belfast Taxi
Article Source: http://www.simplysearch4it.com/article/34895.html
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