Can The First Time Buyer Still Successfully Get on the Property Ladder?

The dilemma for the first time buyer in the current property market, is that the prices of property have risen to such an extent that on the surface it can seem near impossible for ordinary person looking at buying their first property to achieve success through the regular mortgage route.

Rather first time buyers have to rely on financial aid from parents, friends as well as other acquaintances. Other than this, they also have to risk a number of years of struggle in order to make their climb up the property investment ladder.

Lenders know that there are various problems which the ever increasing property prices are creating for first time buyers. Lenders are also aware of the problems which it causes them because a substantial amount of their profits is gotten by way of interest which is paid out to them on mortgages. For this reason, when the first time buyer is priced out of the market, lenders find out that they have a serious financial problem on their hands.

In order to try and seek out solutions to their problems, a lot of lenders have come up with newer and much more innovative ways for first time buyers to fund purchases. Means such as buying with friends, interest only mortgages and self certified mortgages are becoming much more popular.

What some these innovative methods of financing are resulting in, is a situation where people are able to get mortgages which are a whole lot higher than what they were previously able to get. Other than this, it was previously almost impossible for people to tap into mortgages which were more than a few times their annual salary. By making use of methods such as self certification for mortgages, they are now able to tap into these mortgages sometimes with no required proof of income.

Regardless of whether you have been in the UK for only a few years, if you have succeeded in building up a good credit rating and you are conversant with the available mortgage deals and their associated loopholes, it is relatively easy for you to get financing.

The question however is whether it is worth the risk. If you look through historical evidence, you would most definitely see that it is. A lot of people who succeeded in paying off their mortgages are better off these days.

You usually find a lot of people discussing about the level of equity which they have accumulated in their homes. History shows that the property market swings both ways, up as well as down. It always recovers after a fall and goes through periods of speedy growth.

Despite all this, you have people who have had their homes repossessed from them and whose lives have been ruined due to the fact that they have to keep up with huge mortgage costs. If you see how their dreams of making it in the property market have been ruined, you might understand why some people are very averse to considering a dive into the property market.

People can understand the reason why the first time buyer always finds themselves in one dilemma or the other when it comes to assessing the profitability of the property market. The problem maybe the case due to the fact that the first time buyer is asking the wrong question, if the question was changed from, would you risk everything to get on the property ladder to would you be prepared to do whatever is necessary to remain on the property ladder, you might see some clarity in the situation.

Anyone who has never taken that chance and gotten a mortgage that is way beyond their means will not understand. Others have done it and tried every possible way to pay their mortgages. Some have gone as far as getting another job and working an excess of 70 hours on a weekly basis or doing some other such strenuous work all in a bid to make it. A lot of people have made the necessary sacrifices and made it in the property investment world and other first time property buyers should be ready to do this as well.

The first time buyer who manages to buy their property but then ends up losing it down the road tends to fall into two categories, there are those who were not prepared to make the needed sacrifices and failed to do what was necessary in order to keep up with the necessary repayments on their mortgages.

Related Articles! The Effects of the Credit Crunch Buy to Let Mortgage Advice Is the Property Market About to Crash

Secondly there are those who encountered problems which they thought they could not possible recover from. Perhaps these people became redundant or ill or had an accident which hampered their ability to work in one way or the other.

It could also be argued that the second group falls into the minority category because if these people have had the determination to still pay their mortgages or if they had had the courage to downsize if they deemed it important, they would find themselves in a situation where it was still possible to achieve their goals. So back again to the question:

Would you be prepared to do whatever it takes to stay on the property ladder?

Having the right answer to this question may hold the key to determining whether a particular first time buyer can successfully hold on to their property or whether they will be compelled to join the ever growing queue of people faced with the threat of bankruptcy.

return from this first time buyer page to the home page of investment property guru

Return to top