Recent research indicates that more first time buyers are opting for a 35 year mortgage term, in addition to having to find a larger deposit compared to previous years.
The Halifax has released a report stating that the UK housing market now has fewer first time buyers, while an average deposit has risen above £30,000. The number of first time buyers has fallen for the first time since 2011, with a reduction of 0.5% on the 2014 figure. This decline is thought to be due to a struggle to save for the larger deposits and from a lack of affordable properties for sale. In 2015, the average deposit had risen to £32,927.
In London, first time buyers have to save an average of £91,409 before being able to buy a property. The report indicated that first time buyers provided larger deposits and borrowed the money over a longer mortgage term than buyers in previous years. In 2015, 25% of first time buyers had a mortgage lasting 35 years. Although more help is available to those buying for the first time, the rising property prices mean that a larger deposit needs to be found.
A mortgage broker from London & Country, David Hollingworth, said that it was preferable to borrow over a longer mortgage term than to take on an interest-only mortgage without any means of repaying the capital.
A mortgage adviser who has had CeMAP training is able to advise the most suitable mortgage product and provide details of any schemes which are designed to help first time buyers.
