It’s not just first-time buyers
The struggle of the first-time buyer is well documented in the media and lenders do what they can to help young borrowers onto the property ladder. However, many who seemingly “made it” with home ownership, are now struggling to get onto the second step, which can be a problem, especially with a young family.
This does not constitute advice and advice should be sought in all instances before acting on it.
Your property may be at risk should you be unable to maintain any agreed mortgage payments over the term agreed.
Grateful but stuck
Of course, you ask most people that fulfilled their dream of first-home ownership if they are grateful for that, and the answer is almost always, “yes”. Particularly if those people are speaking to someone who is renting right now, unable to save enough for the deposit to meet increased house prices.
However, gratitude aside, it doesn’t deter from the fact that many first-time home owners are now stuck in a first-time buyer home, unable to upgrade to a more suitable property, typically to cater for new family members that have joined along the way. Does this sound familiar?
Cause and effect
In many parts of the country, house prices have increased by far more than the prices of apartments and flats.
A study by uSwitch.com showed that house prices in Britain had increased by 21 percent over the past decade, compared to flats that had risen by just 15 percent, leaving a 6 percent point gap.
In some parts of the country the point gap was as high as 16 percent.
What this means practically, is that first time buyers that bought a small “starter home” a few years ago, will now have to bridge the gap between what they can sell their home for in order to buy another one.
Are you looking for your second home?
If you are looking for your second home, there are a few things that may help you fulfil your dreams of upgrading to a bigger space for you and your family.
- Carefully choose the area you buy – the value of houses has dropped in some places in Britain, so if you are flexible, this could be an option.
- Extend the term of your mortgage – in the same way that first-time buyers opt for a longer term on their mortgage to be able to afford to get onto the ladder, second-steppers may also have the option of extending the term to help make a bigger mortgage more affordable.
- Remortgage or switch lenders – some mortgage companies have options with a smaller deposit requirement. If you have a proven track record of meeting payments and meet affordability tests, it may be possible to gain a higher mortgage now to be able to buy your second home.
- Use our Mortgage Calculators – we have a selection of useful mortgage calculators that can help you work out how you can get onto the next rung of the property ladder. Also, use our Mortgage Tool which shows examples of the mortgages for doctors and dentists that are available.
- Work with a mortgage adviser – whether you are seriously looking to move in the near future, or just tentatively thinking about it for later this year, work with a mortgage adviser who can present your options and help you decide the best route.
Get a mortgage review with Chris
If you would like us to undertake a review of your current mortgage deal or you are thinking of moving house in the near future, please contact Chris for a free, no obligation appraisal.