First time buyers could receive govt help

First time buyers could soon receive a helping hand to assist them with getting on to the property ladder.

According to the Building Societies Association BSA, initiatives are being put in place to ensure first time buyers are given the best possible chance.

Paul Broadhead, head of mortgage policy at the BSA, explained that the government has made proposals for a new housing strategy which could help provide guarantees for higher lending, especially on new-build properties.

"If we get that in the spring then that means that people may well be able to get mortgages on new-build properties with smaller deposits of five per cent as opposed to ten or 15 per cent which has been causing a barrier."

He added that the move would certainly help first time buyers, who are struggling to build up adequate deposits in the difficult climate, particularly as bill and rents are rising while wages remain stagnant.

Add the uncertain labour market and falling employment levels and people have little confidence in their ability to stump up a deposit.

Indeed, he went as far as to say that having enough money for a deposit is the biggest barrier to homeownership.

"There are still things to overcome, but things are being done to try and help alleviate some of those barriers," he added.

Once people have obtained a mortgage, reports widely suggest that owning a home is actually less expensive than renting, particularly as the rental sector is booming at the moment.

Recent findings by Barclays suggested that lenders have been offering some of their cheapest mortgage deals which made 2011 the most affordable year for monthly mortgage payments for ten years.

On average, people paid out 15.4 per cent of their net wage last year to cover their monthly payments, compared to 2008 when it reached its highest point at 20.5 per cent.

Make your money go further with Moneyextra.com. We offer a range of financial help including credit and prepaid cards, debt advice, insurance and mortgages.

Moneyextra.com recommends you take independent financial advice before acting on any article

Back

2012-01-11 13:34:47 © Moneyextra.com