There have been reports circulating around in the UK mortgage market that the number of mortgage deals aimed for first time homebuyers is increasing. Figures have also shown that about 400 mortgage packages are now available for borrowers with a 15 percent deposit, which is now considered to be relatively low given that the lenders have been asking a huge minimum deposit from borrowers.
However, while the number of mortgage products accepting a minimum deposit of 15 percent has been increasing, figures showed that first time homebuyers need to have at least £50,000 to be able to get a mortgage and get into the property ladder. For many first time homebuyers, looking for this big amount of money proves to be impossible, and many are still out of the property market.
While easing mortgage restrictions and the increasing mortgage product should provide first time homebuyers, who have been struggling into the mortgage market in the past years, with an easy access into the property ladder, the amount of money required and the lending criteria means that their dreams are still impossible to reach.
The required deposit is being calculated based on the latest affordability rates and house price index from FindaProperty.com. Officials from the company said that the gap between the amount of deposit required to first time homebuyers and the amount they could borrow had narrowed.
Based on a survey, about 50 percent of first time homebuyers interviewed said that it was not the monthly mortgage obligations that they cannot afford but the amount of money needed to raise for the deposit required.
One industry player said that house prices are beginning to show upward trends, which means that first time homebuyers would find it increasingly hard to raise the money needed for deposit to own their own house. He added that the current number of entry level homes on the market is less than 12 percent compared to the last 12 months.