Are potential first time buyers in the UK gamblers? We currently have a situation whereby builders are prepared to offer mortgage under shared equity schemes. Yes, they will give people the opportunity to get a foot on the housing ladder, but are they the best option.
Participating in these schemes is a gamble and the gamble is that house prices will rise. However, in times of continued economic certainty, this may not be the safest bet.
Existing homeowners are struggling to meet their contractor mortgage repayments, and that’s when interest rates are at an all time low. What’s going to happen when the rates increase? The regulators are considering restricting interest only loans because concerns are mounting as to how these will be repaid. When you take these two situations into account, it seems unlikely that house prices are going to rebound soon.
However, a lot of mortgage experts believe that the housing market has still not bottomed out and prices may fall by another 10%.
Conflicting information not surprisingly continues to baffle the UK’s potential first time buyers. Whichever route they decide to take, they’re gambling on house prices either falling further or making a steady recovery.
New mortgage products are appearing on an almost daily basis, all with different rates, fees and conditions. People who are saving for a deposit have to put up with ever increasing rents as buy to let landlords cash in on the surge in demand.
The housing market has to stabilise eventually but until it does, picking the right time to get on the housing ladder looks as likely as picking the winner in the 3 o’clock at Sedgefield.
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