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6 Million Brits Shun The Property Game

by Sean Matthews

Whilst the availability of credit might be improving on the high street, people are still nervous about committing to a mortgage.   Research is suggesting that over 6 million Brits have given up on finding a mortgage and have decided to rent or stay at their current property until the market improves.

Unfortunately, it’s a catch 22 situation.  The market needs confidence from buyers in order to recover and buyers need confidence in the market.  Mortgage rates are steadily falling and the number of mortgage products being offered are on the increase.  However, these products are focused at the high end of the market and are therefore only accessible to those homebuyers with significant equity available.

According to a report released by moneysupermarket, those looking for a house now expect to buy their first home at around 38 years old and only 5% of those planning on buying a house in the future actually have a deposit saved.

However, the number of products aimed at first time buyers has risen by almost 200 which still offers some hope for those wanting to purchase their first property.  The average loan to value (LTV) for first time buyer products is around 77% which means that first time buyers still need that all important deposit.  Whilst house prices may have dropped, the cost of living has continued to rise, and less people have the spare funds to commit to saving for a deposit.

For those with a deposit of 10% the market is still limited when it comes to mortgage products and any products have rates that are significantly higher than the most competitive mortgage rates.  This makes the monthly payments for first time buyers much higher than those with larger deposits.

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