Guide for First Time Property Buyers

Buying your first property is a daunting prospect, especially in the current climate. With many different types of mortgage to choose from and uncertainty over the future of UK house prices, it is small wonder that the percentage of first time buyers continues to fall.

A survey conducted by the Council of Mortgage Lenders (CML) has shown that almost half of all first time buyers under the age of 30, receive financial help from a family member to help them provide a deposit on their first home.

This shows a marked increase from the same survey conducted in 2006 which showed that 38% of first time buyers received financial help. Although house prices have fallen by 14.6% this year (according to the Nationwide) first time buyers are not able to take advantage of falling prices as lenders now require substantially larger deposits. The CML reported that the average first-time buyer needed a deposit of £14,500 in 2007, yet in the second quarter of this year, this had risen to £19,000.

The Best Home Mortgage website is an independent guide and gives an overview of the different types of mortgages on offer, the costs you can expect and the decisions that you will need to make when making your first purchase.

If you would like to speak to one of our mortgage experts, give us a call on 0845 8620 866 or fill in our callback form and we will be in touch.

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• Early repayment charges
• Fixed rate or Discounted mortgage?
• Leasehold or freehold?
• Conveyancing and surveys

The latest Nationwide house price index reveals that the average house price in the UK now stands at £158,442, a 0.4% decrease from October.

The year-on-year decrease from November 2007 is 13.9%, down from 14.6% last month.

Fionnuala Earley, Nationwide’s chief economist, said: “In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market. The labour market is weakening, which will inevitably hinder market demand, particularly when property remains expensive relative to earnings.

“With prices falling at their current rate there is also little incentive for new borrowers to hurry into the market. However, there are a number of measures which should provide some support to the market in general and help existing and potential homeowners in these difficult times.

“The Monetary Policy Committee’s decision to reduce interest rates by 1.5% at the November meeting took most commentators by surprise. It was a bold step and has left no doubt that the focus of their concerns has shifted from inflation to deflation.

“While not aimed directly at the housing market, such a substantial shift in the Bank Base Rate will help a significant number of existing and potential homebuyers. Different borrowers will be affected in different ways by rate cuts. The estimated one-third of borrowers on tracker mortgages will have benefitted one-for-one from Bank Base Rate cuts.”