For the past few years, many potential first time buyers hoping to climb onto the first rung of the property ladder have faced huge hurdles. For some, the cost of purchasing a home has been way too high while for others the difficult financial climate has made it impossible to get a loan. On top of this, crippling deposit demands from lenders has led to many being frozen out of the market, as they have been unable to raise the huge sums of money that lenders have demanded by way of a deposit.
However, recent figures have suggested that there could be light at the end of the tunnel, with mutuals reporting a sharp increase in the number of home loans granted to first time buyers during the first half of this year. The figures from the Building Societies Association have indicated that home loan levels to first time buyers have increased by 50 percent in the first five months of the year.
Although many first time buyers have struggled to find and get accepted for a suitable mortgage loan, many have turned to specialist companies such as Network Capital Funding Corporation for help. This has helped to boost their chances of finding a suitable home loan at a competitive rate, as they have been able to discuss their requirements with industry professionals rather than being left to fend for themselves with little or no knowledge of the mortgage industry.
In the UK, the government has further boosted the chances of success for first time buyers, with the launch of schemes such as the Funding for Lending scheme. This scheme has provided lenders with access to reduced rate funding in a bid to encourage greater levels of lending to home buyers. The latest figures with regards to year on year lending levels appears to suggest that the scheme could be having a positive effect on lending levels, although the longer term effects still remain to be seen.
Data has also shown that there has been a significant increase in the number of home loans arranged for first time buyers with a deposit of 10 percent or less. Over recent years, with lenders demanding significant down payments, many first time buyers have been unable to raise the necessary deposit to purchase a home. However, the BSA figures showed that this year there were two and a half times more home loans arranged for those with a deposit of 10 percent or less.
The past few years has proven difficult for would-be first time buyers, with many being forced into rented accommodation due to difficulties in obtaining a home loan. This has in turn resulted in rental costs rising, leaving potential buyers in a situation where their rent is too high for them to put money aside towards a deposit. However, with the assistance of government schemes, industry experts, and continued low interest rates, some may finally find themselves in a position where they can become homeowners for the first time.