Potential first time buyers worried about taking the plunge
A recent report has shown that potential first time buyers who are looking to get onto the property ladder are actually too nervous to take the plunge in the current economic climate, with many preferring to wait and see what happens with credit conditions, house prices, and interest rates before make a decision to purchase a home. First time buyers have faced a range of difficulties over recent years in terms of getting onto the property ladder especially with the recent move by major banks to remove 100% mortgages.
Over recent years soaring property prices and high interest rates have stopped many would-be first time buyers from getting onto the property ladder. However, there are now many predictions that the interest rate is going to continue falling over the course of the year, having already fallen twice in the last few months, as well as predictions that property prices could tumble by ten or twenty percent over the next couple of years, leaving the average property price at £160,000 based on a 20% fall.
Although this is good news for first time buyers many are still holding off buying in order to see what happens with interest rates and house prices. Whilst both have fallen over recent months, potential first time buyers are concerned that they could end up paying a high price for a property now, and then could see the value of the property tumble in less than 24 months, which could see them getting into negative equity very quickly.
Another thing that potential first time buyers are concerned about is the global credit crunch, which has resulted in far tighter credit conditions, making it more difficult to get finance. Mortgage loan lenders are also asking for more by way of deposit in order to get access to their most competitive deals, which is something that most first time buyers cannot afford to do.
