First-time buyers are finding it increasingly difficult to get a foothold on the property ladder as prices rise and deposit requirements make potential homebuyers wait longer.
According to Moneyextra.com, prices for first-time buyers have increased by almost three per cent to £187,911. It found that the average first-time buyer mortgage is now £133,943, which would typically require the equivalent of two years’ average earnings for a deposit. It also found that 80 per cent of first-time buyers are looking to purchase property on their own rather than with a partner.
And first-time buyers are not the only people to be struggling. The company found that average house values have risen by 2.3 per cent to £227,484 for the 12-month period ended November 2007. However, while, prices for those moving properties have fallen slightly, remortgagers have seen an 8.6 per cent rise to £256,868.
Senior editor of Moneyextra.com, Robin Amlôt, said: "The sharp rise in property values of those remortgaging may be an indicator of how the credit crunch is extending beyond the traditionally vulnerable sectors of society."
"At the same time we’ve also seen an increase of almost a fifth (18.8 per cent) in the average value of secured loans being sought over the last 12 months. The average secured loan is now £31,578, up from £26,584 in November 2006," said Mr Amlôt.
The research found that the average loan-to-value ratio was 60.27 per cent and that the average amount borrowed across the categories was £137,115.00. Its expectations for the near future of the mortgage industry are far from optimistic.
"The outlook for the mortgage market in 2008 is fairly grim. While interest rates appear certain to be significantly lower in 12 months time, we may have an uncomfortable journey getting there," said Mr Amlôt.
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