First Time Buyers its a Buyers Market

As 90 percent of mortgages fell dramatically with the credit crunch, even now Scottish property buyers are still facing major obstacles. With high levels of cash needed for deposits, first time buyers are struggling to get on the first rung of the property ladder. Fortunately, as home affordability improves, it’s a buyer’s market, and it seems that lenders are gradually moving into the 10 percent market again. This is great news for first time buyers, and for those who don’t have much equity in their home. 

Although deals have improved lately, borrowers should still expect to pay a premium on their rate, not to mention Lenders demanding a near perfect credit history with loan-to-value or LTV mortgages. LTV mortgages are particularly important to first-time buyers to secure their first home. For example, if you have a mortgage of £150,000 on a £200,000 value property, you have £50,000 equity which is an LTV of 75 percent. First time buyers may not have much money to use as a deposit so would need a high LTV percentage. There is also the option of longer repayment methods offered by some providers which has been encouraged by the government.

Families on low incomes renting property from a housing association and members of the armed forces and war veterans are priority groups that may benefit from the LIFT scheme. This is a Scottish Government scheme which brings together different ways to help households achieve home ownership. These schemes are mainly to assist first time buyers on low incomes e.g. the New Supply Shared Equity (NSSE) Scheme, the NSSE with Developers Scheme and the Open Market Shared Equity Scheme. Find out if you are eligible for any of these schemes or for more information visit the Scottish Government website. 

Recent research has shown how difficult life is for first time buyers, being hit by house prices that have risen faster than earnings. Tightened lending criteria following the credit crunch has forced first-time buyers to turn to parents and grandparents for financial help. The only option for others is to rent their homes and save as much money as they can before being able to buy. However, to save a reasonable deposit could take five, or even 10 years.