First time buyers helped by lenders in 2016

June 14, 2016 by Brendan O'Neill

Lenders

Despite first time buyers experiencing some difficulty as house prices continue to rise and tighter affordability checks, lenders are continuing to introduce new solutions for those who are searching for their first home.

According to research conducted by Intermediary Mortgage Lenders Association, first time buyers have the most promising prospects for growth during 2016. As confidence among lenders increases, further innovation and activity is taking place for first time buyers. There are now more products which offer a high Loan-to-Value (LTV) ratio, so buyers need a smaller deposit, while others are offering mortgages which permit family and friends to help out with the deposit.

Although the mortgage industry is working hard to help first time buyers in an increasingly difficult market, experts believe that the government may also be able to assist. The Help to Buy scheme is due to be withdrawn in the next few months, which could have an impact on the current high LTV products which are available. If house prices continue to increase, this will also have a negative impact on first time buyers.

As first time buyers continue to struggle, more are taking the option of longer mortgage terms, which is the only solution for some despite being much more expensive in the longer term. The average age of first time buyers is also increasing, as the average age is now 31 years old, meaning that buyers may still be paying for their mortgage during retirement. Mortgage advisers study for the CeMAP qualification so that they have the knowledge to help buyers choose the most suitable option for their requirements.