Whilst I sit here in my serviced office, wondering if I can squeeze a discount out of my landlord when the new lease is due for negotiation, some people are having to contemplate far more serious problems.
Property prices remain out of reach for many new buyers and it’s easy to see why so many people are being pushed out of the market. According to the Council of Mortgage Lenders, the average first-time deposit has jumped from £12,556 at the beginning of 2007 to £26,582 in 2011 and this despite a general softening in property prices.
As a percentage of income, this marks a jump from 41 per cent to 87 per cent and to make matters worse, government figures show that annual income for new buyers has fallen over that period, from £34,200 to £32,507. So, the average person looking for their first home is being asked to stump up double the deposit on lower earnings.
According to a study by Moneysupermarket published earlier this month, the average age that people can expect to be able to buy their first property has reached 38 years. The survey also declared, nearly a third of prospective first-time buyers have given up on getting on to the property ladder altogether.
Buyers in London are even more pessimistic, believing they will be 43 before they can afford to stop renting. The problems cited were, strict mortgage lending and hefty deposits as the main reasons for the delay.
Lenders are also complicating matters by squeezing out older borrowers, with most now refusing to offer mortgages that extend beyond the age of 65. As of Friday, Coventry Building Society has gone even further by saying it will start limiting the level of borrowing that it will offer to customers aged 56 and over.
We are being squeezed by the banks at every turn, whilst they still insist on claiming obscene bonuses for themselves. Mark my words, we will not be able to forge ahead as a country while the banks continue to spend money on themselves like third world dictators while the country’s residential and commercial property markets suffer.
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