Increase in First Time Buyers Stepping onto the Property Ladder.

Increase in First Time Buyers Stepping onto the Property Ladder.

Conditions are carrying on improving with regards to the property market. This has seen an increase in first time buyers due to more available mortgages and government property schemes such as Help to Buy.

Saving for a substantial deposit still remains a hurdle to getting on the property ladder and with house prices continuing to rise it is becoming even more of a challenge for the majority of buyers.

 

Higher loan to value mortgages are increasing also so there are plenty of options for buyers with smaller deposits. Some of the present 90% loan to value mortgages are very competitive with interest rates as low as 3.54% (Chelsea building society). Currently the two-year fixed rate is a popular choice with many borrowers thinking they will be able to remortgage onto another fixed deal at the end before interest rates rise.  Howeverthis can be a gamble as no one can predict when rates will rise. Although there are currently some other good five-year fixed rates available for example Nottingham building society offers a five-year fixed rate at 4.39% for 90% LTV with a £299 fee.

Mortgages with a 95% Loan to value still remain minimal and rates on these can be a lot higher than mortgage with a lower LTV. Although this may not be a bad thing as borrowing a high LTV when interest rates are so low may not be a wise idea.

Lack of housing still remains an issue and there is a shortage of new homes being built in contrast with our ever expanding population.

 

Planning Appeals... What are they?

Planning appeals are generally submitted by people who do not agree with a decision made by the Local Authority. This is most often when a local council planning application has been submitted and has then been refused, an example would be if a house holder applies to build an extension to their house and the local council planning authority turns their application down.

Planning appeals can also be submitted when an Enforcement Notice has been served. An example could be if a property has been extended without planning consent and the local council planning authorities have ordered that the extension be demolished or its appearance changed.

Planning appeals can also be made against a local council planning authority’s failure to make a decision about a planning application within a given time.

Planning appeals are dealt with by the Planning Inspectorate which is a Government Agency.  Appointed by the Secretary of State – the Planning Inspectorate considers planning appeals against the decisions of local council planning authorities all over the Country – usually against their refusal to grant planning consent.

Planning appeals can take the form of a written submission where the planning appeal is dealt with in writing only – these are usually for small appeals and where there are very few points in dispute. For larger more complex issues a Formal Hearing may be required with the Planning Inspector acting as a judge. Finally, for the most serious matters, the planning appeal may take the form of a Public Enquiry.

Uncertanties about the Help to Buy Scheme

An end is put to uncertainties about the Help to Buy scheme fuelling second homes and foreign buyers

David Cameron has spoken up to clarify that the Help to Buy scheme is not available to people wanting to purchase a second home or to foreign buyers. He stated the Help to Buy Scheme is aimed at helping people onto the property ladder. The scheme is only to be used for people who are purchasing their own home to live in.

According to Cameron there will be a mechanism in place to ensure that foreign buyers and second home owners do not qualify for the scheme. Another point he made was that to qualify for the scheme you have to have a credit record in this country.

There are to be clear rules published relating to the scheme. It has been criticised that the scheme is artificially inflating house prices into a housing bubble. But time will tell…

What’s your opinion on the scheme?

We have a dedicated Help to Buy website for more information…

 

Click here to visit our dedicated Help to Buy website

UK housing market finally on the up!

UK housing market finally on the up!

Rate them or slate them, the new government schemes aimed at getting the property market moving again are proving to be working. The demand for housing is the highest since 2009, and the new government Help to Buy scheme is proving to be one of the reasons for this. After the Stamp Duty Holiday there was a lull in the property market for first time buyers, however now that mortgages with a higher loan to value and new government initiatives are more readily available the number of first time buyers is increasing.

Help to Buy Scheme

It is encouraging to see government schemes are having a positive effect on the property market. Help to Buy is aimed to enable people to purchase property with a small deposit (5%) and the government lending the further deposit (20%)  interest free for the first 5 years enabling the buyer to get a lower LTV mortgage (75%) with a lower interest rate and smaller monthly payments compared to if they took out a 95% LTV mortgage. Help to Buy is open to everyone, not just first time buyers; this may be why it is a factor in the rise of property demand. However developers need to be true to their word in delivering more housing so that house prices do not rise too drastically. According to a monthly report carried out by the RICS (Royal Institution of Charter Surveyors) property prices are starting to rise and inquiries from new buyers were at their highest since November 2009.

Funding for Lending Scheme

Another factor which may be responsible for the increase in the housing market is the Funding for Lending Scheme, introduced last August. It was aimed at making borrowing easier for prospective buyers, with mortgage lenders loosening strict mortgage requirements this has helped to reduce mortgage rates. The Funding for Lending scheme was designed to enable was designed to enable greater availability of funds to lenders at a lower cost and proves to be paying off. With lenders more confident in their credit supplies they are more openly providing borrowers with mortgages and supporting first time buyers. In conjunction with each other these schemes have had a positive effect on housing market activity and it is showing signs of further growth.

The Concerns

All this being said there are also some issues which may arise. House prices are gradually being pushed up, however this makes property which has been unaffordable even more unaffordable to buyers. Within our economy earnings are still showing very low signs of growth. With a demand for property and developers under pressure to deliver it is inevitable that property prices will rise.

The property market is still a favourable place to those looking to buy their first home. According to the Council for Mortgage Lenders more borrowers are taking out higher loan-to-value mortgages than any other time over the last four years. At first people were dubious about the success of these government schemes but from all the evidence they are only proving to be of help.