Situation gets increasingly worse for first time buyers

According to a recent report the situation for first time buyers trying to get onto the property ladder in the UK has become worse than ever, with a whole host of problems standing in their way of becoming homeowners.

Would be first time buyers have already suffered problems over recent years due to the sky high cost of houses in the UK.

However, whilst house prices are now falling, which would normally have been good news for first time buyers, and interest rates are also falling, the ability to get finance has been reduced dramatically as a result of the global credit crunch.

Many first time buyers may therefore struggle to get the mortgage that they need.

Lenders have tightened up their lending criteria, increased interest rates on their mortgages for new borrowers, restricted or withdrawn many mortgage products, and are demanding higher deposits, which most first time buyers simply cannot raise.

One housing charity official said: ‘Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse. It means there is a generation of young people and young families being locked out of the housing market without a hope of ever sharing in the asset wealth of the generation before.’