The harsh mortgage situation in 2011 will impact a great deal on first-time buyers. The hefty deposits asked for by lenders and problems obtaining finance will continue to keep a lot of people from getting a foot on the bottom rung of the ladder, whether it be in residential or commercial property.
According to the CML, with funding in small supply the accessibility of mortgages for first-time buyers will stay restricted, with lenders liable to carry on having only a ‘modest appetite’ for advancing mortgages at elevated loan-to-value ratios.
It is believed, mortgage lending will continue to be the preserve of those with large deposits, perfect credit and steady jobs.
Melanie Bien concurs that it will be ‘hard for first-time buyers to get on the property ladder except if they have saved a minimum10% deposit.’ She also cautions that, with first-time buyers in short supply, the entire property market is on shaky ground. First time buyers are the lifeblood of the housing market and the reason for any advancements.
Nevertheless, some commentators are more optimistic about the scenario for impending buyers in 2011.
‘Lenders are becoming more flexible and have additional money available, which might lead to a positive effect on the market in 2011,’ said Malcolm Waldron, regional director of estate agent Kinleigh Folkard & Hayward Financial Services.
He added: ‘This is not likely to encourage a raise in the number of transactions but it might mean a wider range of mortgage products on offer for those borrowers who are financially equipped.’
Miles Shipside, director of an online property portal said: ‘Competition is a fundamental constituent of mortgage accessibility as it delivers decent rates like those seen during the surfeit of growth of the credit markets we are struggling to recover from. With interest rates expected to increase in 2012, more competitive mortgage deals will be vital to offset the rise in base rates and stop an additional frustration of buyer demand and housing market recovery.’
He adds that prices could well be around 10% lower than the mid-point of 2010, helping general buyer affordability and the housing and commercial property market recovery.
