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Half of First Time Buyers Experience House Purchase Fall Through

Half of First Time Buyers Experience House Purchase Fall Through Rose Capital Partners

Half of First Time Buyers Experience House Purchase Fall Through

It has been the busiest year for property transactions for 14 years. A whopping 1 in 16 homes will have changed hands by the end of the year.

House price growth continues to be underpinned by the supply and demand imbalance, with the supply of homes being listed for sale this year running between 5% and 10% below the 2017-2019 average.”
— Richard Campo
LONDON, UNITED KINGDOM, December 9, 2021 /EINPresswire.com/ -- The UK housing market is highly competitive with figures from mortgage lender Aldermore showing that 49% of first time buyers have experienced a house purchase fall through since the start of the Pandemic in March 2020.

This is largely down to first time buyers being outbid, but it is also because it is taking longer than planned to get their mortgage organised. This is a key factor when vendors are working in a red hot market and do not want to wait.

Mortgage advisers experience this on a daily basis, either because first time buyers are being referred to them because clients have been let down elsewhere, or because the clients have run into unexpected hurdles. All of which wastes time and jeopardises the purchase.

First time buyers are being strongly urged to contact their mortgage broker as early as possible when they are considering a purchase. This is so the mortgage lending can be agreed upon AHEAD of finding a property to buy. This means that if there are any kinks in the process, the mortgage broker has time to iron them out BEFORE it ever becomes an issue with an unreasonable vendor. Even if a house purchaser thinks their situation is simple, mortgage lending often is not. If a mortgage applicant earns bonuses, has been out of the UK, or even moved roles, it may be more complicated to organise a mortgage than in prior years. These complications can more often than not be overcome, but a delay of weeks, or even days, can risk the purchase.

Figures from IMLA (the Intermediary Mortgage Lenders Association) have shown that the average property is now 8.8 x the average income. This is a really key metric for first time buyers that often determines how affordable homes really are. As house price growth has consistently outstripped wage growth for a while now, the market has reached a new tipping point.

The good news for first time buyers is that the figures confirm that buying is much cheaper than renting. The average mortgage repayment takes up 16.7% of the borrower’s income, while rent takes up 25%. With house prices continuing to march on, and mortgage rates not set to rise too significantly, it seems more affordable to buy. However, this may be out of reach for some first time buyers if their earnings do not keep pace with the market.

So whatever 2022 holds, it makes sense for first time buyers who can afford it not to delay a purchase any longer than necessary.

Richard Campo
Rose Capital Partners
2079357866 ext.
info@rosecp.co.uk
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