First time buyers continue having a hard time to get their foot on the property ladder.
Not only are house prices sky-high and deposits a challenge to raise, lenders have tightened the rules on how much people can borrow when comparing to their income.
Known as “income multiples” this is now factored in by lenders to ensure affordability on the monthly mortgage payments.
Uphill challenge
First time buyer mortgages are becoming increasingly difficult to come across, as not only are house prices soaring, resulting in the requirement for larger deposits, but borrowers are not earning sufficient salaries to meet the tighter rules and regulations around affordability.
Recent changes means not only does a buyer have to provide a substantial deposit, but they also need to prove they are capable on a monthly basis to meet the mortgage requirement.
Did you know? The average deposit in the UK is in excess of £72,000
Income multiples for first time buyers
How it works. For example, if a lender offered an income multiple of 5, then a buyer with a salary of £35,000 would be able to borrow £175,000. With a salary of £45,000 they could borrow £225,000.
The reality is that many lenders are reducing their income multiples to below 5, meaning that the amount someone is able to borrow is reducing.
Read more: Why are banks not helping first time buyers
With income multiples reducing and house prices rising, it’s a difficult market for first time buyers.
Dental & Medical Financial Services specialise in helping first time buyers to obtain the best mortgage rates possible. Our specialist lenders have access to great rates and high income multiples for doctors and dentists. Call Chris today for all your mortgage requirements.
Tel: 01403 780 77