When it comes to mortgages, affordability is always going to be a challenge

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When it comes to mortgages affordability is always going to be a challenge

First Time Buyers

One of the things I love most about this job is helping people with life enabling situations, be it securing a mortgage, life insurance or income protection. At the moment, first-time buyers are getting hit from all angles – property prices are still rising, mortgage rates on the up and many who are renters will see their rents increasing this year too according to the latest report from the Royal Institution of Chartered Surveyors.

Bank of Mum and Dad still lending

Seasoned as we are, we’ve been here before so we make sure we ask all the right questions about income and count everything that’s allowed to contribute to the first time mortgage. Rightmove has some good news with their data showing that demand for first-time buyer type properties is up 32% compared with 2019, despite affordability challenges. A 10% deposit on an average first-time buyer type home is now £22,494, which is 57% higher than ten years ago (£14,316). Estate agent Savills has said that the Bank of Mum and Dad will support nearly half of all first-time buyers with gifts and loans set to total £25 billion over the next three years (2022–2024). Its analysis found that, in the three years to 2024, almost half a million first-time buyers (470,000), equating to almost one in two first-time buyers, will get financial help from a parent or other family member. This help is likely to be needed to replace the government’s low deposit Help-to-Buy Scheme which finishes on 31 March 2023 although properties need to be reserved by 31 October this year.

August recording a fall

The first monthly property price fall of the year has been recorded in August with a drop of -1.3% but if you’re looking to buy, don’t get too excited as prices usually drop in August as summer holidays take priority and some new sellers are pricing more competitively to secure a buyer quickly and move home before Christmas. And while Rightmove says that new listings are up by 12%, taking some of the edge off the competition, available stock is down 39% on 2019 so that will keep prices keen if demand for property keeps pace.

House prices beat inflation

This month also marks 20 years since the first Rightmove House Price Index was published. Since its inception, average asking prices have grown a whopping 134% from £155,994 to £365,173. Meanwhile average salaries have grown by 76% and the Retail Price Index has increased by 93% in the same period, so house prices have been outstripping both salaries and general inflation over those 20 years.
Co-incidentally, it’s been just over 20 years since I started The Mortgage Brain and while property market has seen many twists and turns since then, the ethos of our business remains the same – honest, speedy and expert advice – and of course securing the best mortgage deals. Many of our customers have remained with us throughout our journey as we have on theirs and we look forward to helping new and existing customers alike through the next few decades.

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