As has been the case for the last couple of years, there are many potential first time buyers in the UK that are itching to get onto the property ladder, despite sky high property values and interest rates that are at a six year high. However, a number of industry experts are now urging those looking to get onto the property ladder to take a step back and think before making such a long term commitment with haste.
Some experts are stating that it could be in the best interest of the potential first time buyers to stand back and wait for a short while, as there may be changes coming that could make home ownership more affordable and simpler for the first time buyer. Over the past couple of years first time buyers have had to take out huge mortgage loans to fund the purchase of a property, and over the past year have also had to cope with five interest rate rises, which means higher fixed rate deals and higher repayments on variable rate mortgages.
Experts are stating that, as a result of the recent turmoil that has hit the financial markets on a global level, it could be well worth consumers waiting until the market has calmed down, when lenders may be less cautious and mortgage loans may be more accessible to a wide range of consumers. It is also thought by many industry professionals that house prices may be falling over the coming months, and for potential first time buyers who do not have to luxury of equity from a previous property to put towards a loan, this means having to take out a smaller loan as well as find a smaller deposit.
Finally, some also state that it is worth waiting to see whether interest rates fall towards the end of the year. Although some experts though that interest rates would rise again this year, the level of CPI inflation coupled with the recent financial turmoil makes it unlikely that the Bank of England will raise rates again this year.
First time buyers are being urged by some financial advisers to hold out for six months and either continue living with family or opt for a six month tenancy with a landlord in order to benefit from the possibility of lower prices and reduced interest rates if and when they do decide to buy a home.
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