Are better mortgages REALLY available?

publication date: May 26, 2010
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Are better mortgages REALLY available or do First Time Buyers just THINK they can’t afford to own property?

Are better mortgages REALLY available or do First Time Buyers just THINK they can’t afford to own property? Recent research from Unbiased suggests that people’s perceptions of mortgages lending criteria available is lagging behind what they can actually borrow.

People’s PerceptionReality according to Unbiased
Average mortgage multiple is 3.3 x salary4 x average income 
40% believe need a 20% deposit90% is now available

Karen Barrett, Chief Executive of Unbiased says “While we haven’t returned to a period of ‘easy credit’, there is now a much higher quantity of affordable mortgage deals on the market place.” Interestingly unbiased suggest customers go to a whole of market mortgage adviser to “dispel the myths and get the best advice on their mortgage options”. However, our understanding is that many mortgages are not offered through independent mortgage advisors and although it’s a good idea to talk to an IFA (Unbiased has a directory of IFAs) you should also go to a mortgage broker AND check out the latest from banks and building societies.

Whatever people’s perception of mortgage deals is however, there is no escaping the fact that many people are being put off buying a property by the need to save for a deposit. Many potential First Time Buyers don’t believe they can save for a deposit and the latest statistics from British Airways’ Business Life magazine suggested that 34% of youngsters rely on bail outs from their parents just to cover their current living expenses.

If potential buyers don’t think they can save for a deposit or aren’t willing to cut back on their spending, and on top of this they are not sure if their job is safe or what tax rises are ahead, it’s not a surprise that many young people are frightened of taking on a big financial commitment at this stage of the recession/recovery and prefer the freedom of renting instead.

When will people buy property and borrow again? Read on to find out the answer!

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