First time home buyers facing hard times
London (Ask4loan) December 10, 2007: According to the Building Societies Association, raising an initial deposit is the greatest single barrier for first time home buyers. An average home buyer requires around £20,000 as the initial deposit but it is surprising that many people find it hard to manage this amount.
Adrian Coles, director-general of the Building societies Association said: "The existing government schemes designed to help aspirant first time buyers fail to recognise that it is the deposit that is the problem rather than the monthly mortgage repayment. With rents being so high in many areas, buyers find that their monthly housing costs are often no higher than their previous monthly rental payments."
In another development, the head of the Council of Mortgage Lenders warned that new home loans will nosedive next year if funding markets remain frozen. After the credit squeeze in the UK, the cost of borrowing has increased and it has become tougher for the borrowers to raise home loans and personal loans. Inter-bank lending rates have soared in recent weeks. Many banks and building societies are offering high interest rates on savings to attract more deposits from the customers.
Amidst these tightening credit conditions, it is not easy for the first time buyers to manage initial deposits.