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Lack of funding and higher deposits needed
First time buyers will struggle even more to find enough money to form a deposit to buy a home. The Council of Mortgage Lenders has found that not only has the average age of a first time buyer increased to 37, the amount of deposit required has gone up to £31,500. Figures show that at the start of 2007, the average deposit found by borrowers to purchase their first home was £12,700.
The minimum deposit required at the moment is 10% although the best deals are available when paying a 15% deposit. Another reason why first time buyers are finding it harder than ever to secure mortgage lending is due to the lenders not wishing to lend to any borrower with the slightest whiff of bad credit, something they were not necessarily too bothered about pre credit crunch.
The CML’s director general, Michael Coogan, was speaking a First Time Buyers summit which was hosted by Grant Shapps the housing minister, and also attended by a host if industry representatives. The guests included those from the Home Builders Federation, the Financial Services Authority, the Building Societies Association and from the housing charity Shelter.
The Government has said that it estimates there are around 1.4 million households who would like to own their own home but are unable to do so due to the lack of mortgage availability. The CML has said that the total mortgage advances during 2011 would be around £135 billion which is less than half the £363 billion advanced in 2007.
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Grovelawn Limited is Registered in England & Wales number 5030300. Registered Address: 98 Station Road, Sidcup, Kent, DA15 7BY.
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