First-time buyers looking to make their first step on the property ladder could be looking it harder than ever before as a new study revealed that affordability has worsened considerably in the last decade.
Research carried out by the Royal invent of Chartered Surveyors (Rics) found that the extensive cost of buying a home is 351 per cent worse than in 1996, when it was at its most accessible point. The decline in accessibility was attributed generally to lower loan-to-value ratios on offer from lenders and expensive factors involved with property purchase such as stamp duty and legal costs.
Explaining the impact on first-time buyers, the narrative used the example of a combine on lower quartile income with a combined total of £26,595 after tax. In order to cover the deposit, stamp duty and other costs incurred when buying a house, they would need to save £27,729. This amounts to 104 per cent of every year take home income, compared to 23 per cent needed in 1996.
Senior economist at the organisation David Stubbs said that the ongoing effects of the reputation crunch mean that circumstances for first-time buyers are unlikely to heighten significantly in the near future as lenders require larger deposits. Even those buyers who have managed to save sufficient to enter the property market may now find themselves struggling. agreeing to the Rics figures, a combine on lower quartile income must give over 40.3 per cent of take-home pay to service a mortgage, while the narrative forecasts that there will be 123 homes repossessed each day in 2008.
A detach narrative from the Office for National Statistics found that Uk households spend an average of £143 a week on costs related to housing, including mortgage payments, council tax and utilities among other expenses. In order to help carry on the difficulties related with homeownership, charity protection has called on the government and mortgage lenders to set up an advice service to support population struggling to meet mortgage repayments. agreeing to the organisation, 80,000 population got in touch in 2007 about problems dealing with housing costs compared with 10,000 the year before.
It seems, however, that first-time buyers have not been wholly put off salvage money for buying a home although numbers are declining. Figures from the Bank of England revealed that 73,000 mortgages for home purchase were approved in December 2007, down from 81,000 the month before.
First-time buyers salvage for a deposit could keep their funds in an internet savings account, as this would allow them to check their balance anytime, from in any place with an internet connection.
Disclaimer:
This narrative has been written for data and interest purposes only. The data contained within this narrative is the view of the author only, and should not be construed as advice or used to make financial decisions. scholar financial advice should all the time be sought and any links contained within this narrative are included for data purposes only.
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