Category Archives: First-time buyers

Mortgage reforms have excluded first-time buyers, say UK building societies

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Report calls for overhaul of rules on loan affordability and repayment, and more flexible mortgage products

Mortgage reforms introduced after the 2008 banking crisis have “tilted too far” in support of financial stability to the point that first-time buyers are being excluded from the housing market, building societies have warned.

A report commissioned by the Building Societies Association has called for an overhaul of affordability and repayment rules, which they say have contributed to a steady decline in first-time buyer mortgages since the mid-2000s.

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First-time buyers in UK drop by a fifth as higher mortgage costs bite

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Lender says homes needing renovation are most in demand as people seek cheaper properties

The number of first-time buyers in the UK has fallen by more than a fifth, while homes in need of renovation are most in demand as buyers look for cheaper properties, in the latest evidence that people are struggling with higher mortgage costs.

There were 22% fewer first-time buyers between January and August compared with the same period last year, according to the mortgage lender Halifax. They still accounted for more than half (53%) of all home loans agreed in the first eight months of this year, similar to a year earlier (52%).

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Agreed house sales in UK at highest point this year, says Zoopla

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But property website warns that rebound in activity could be hit by rising mortgage rates

More prospective house sellers are returning to the UK’s property market, pushing agreed home sales to their highest point of the year in May, according to Zoopla, although it warned that the rebound in activity could be knocked by rising mortgage rates.

House prices have fallen by 1.3% nationally over the past six months, the property website found, but the speed of price falls has been decreasing as buyer confidence slowly improves.

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UK homeowners and first-time buyers warned to brace for 5%-plus mortgage rates

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Lenders forced to raise fixed-term deals after latest inflation figure pushed swap rates upwards

Households looking for a new mortgage deal have been warned to expect 5%-plus fixed-rate deals in the coming weeks, after Wednesday’s inflation figures sent the money markets back into turmoil.

Nick Mendes, the mortgage technical manager at the broker John Charcol, said on Thursday that he doubts that there will be any two-year fixed-rate mortgages and probably few five-year deals priced at less than 5% in the coming weeks, as lenders are forced to reprice their mortgages upwards.

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Asking price of properties popular with UK first-time buyers hits record

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Average of £224,963 for homes with one or two bedrooms is 2% higher than a year ago, says Rightmove

Those people hoping to get on to the UK housing ladder are facing record asking prices, as calm returns to the sector after last autumn’s mini-budget spooked the markets.

Rightmove, the property portal, reports that the average asking price of properties popular with first-time buyers – those with one or two bedrooms – has hit a record price of £224,963 in the last month. That is 2% higher than a year ago, even though higher mortgage rates have made homes less affordable.

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Fifty-year home loans would get more on ladder but come with risks

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Analysis: longer mortgages would unlock the bind many renters find themselves in but could be expensive

A 50-year home loan might sound depressing to some, but perhaps not if the alternative is never being able to buy a property. Long-term fixed-rate mortgages are an emerging financial product that should in theory allow first-time buyers who are currently priced out of the market to get on the housing ladder.

By spreading the repayments over longer – the average for mortgages taken out this year is 29 years – buyers should be able to borrow up to eight times their income, rather than the current average of 3.2 times, say potential providers. The loans would be backed by borrowing from pension funds and insurance companies rather than against less stable consumer deposits, to satisfy the Bank of England’s prudential requirement.

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No 10 considers 50-year mortgages that could pass down generations

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Cautious welcome for idea to tackle housing crisis but experts warn of risks to those inheriting

Downing Street is exploring the idea of trying to tackle the housing crisis with ultra-long mortgages of up to 50 years that could pass between generations, allowing more people to build up equity rather than pay rent.

Mortgage experts said the idea could bring some benefits but flagged problems, including the potential to saddle children with debt, and the fact it would not tackle the fundamental issue of housing supply.

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Experience: I accidentally bought a derelict house

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We wanted to bid on a property. But auctioneers speak quickly, and this one had a strong Glaswegian accent

My girlfriend Claire and I had both been to Scotland just once before: me as a kid; Claire for a medical school interview. I’m English, she’s Canadian, and we met in the French Alps in 2016, quickly grew close, travelled around Europe, then got it into our heads that we should move to Glasgow. Wanting a project, we looked at auction listings and found an apartment in Pollokshields, Southside. It needed some love, but the starting price was £10k. Before deciding to bid, I’d spent a few nights sleeping in my van across the street from it. I liked it.

With Claire away, I ventured to the sale alone. It was my first time at a property auction. I took my seat and waited patiently. The problem was auctioneers speak fast, and this one had a strong Glaswegian accent: I was really struggling to follow. Thankfully, a brochure on my seat contained the details for every lot, while a screen behind the stage displayed its corresponding number. I ticked off each sale in my copy as we went, counting down.

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