How The Credit Crunch Has Effected First Time Buyer Mortgages In The UK

Prior to the "credit crunch" of 2008/09 there were literally thousands of first time buyer mortgages available to prospective UK mortgage borrowers.A large range of mortgage lenders competed aggressively for first time buyer mortgage business, in the hope that once someone takes out a first time buyer mortgage, they may remain as a customer for many years.It is the first time buyers that are a major motivating factor for the entire UK mortgage market.To maintain the momentum of sales further up the property ladder, there must be a flow of first time buyers moving onto the bottom of the ladder to keep the cycle going.It is no coincidence that now first time buyer activity has decreased, house prices have stagnated or even started to fall in many areas of the UK.

Before the start of the credit issue these first time buyer mortgages were issued without any margin amount.As a matter of fact between 2005 to 2007 the mortgage products were available even to the extent of 100% mortgages which means there was no deposit required in some of the product.Lenders were prepared to take on the risk which high loan to value mortgages inherently pose - and the focus was directed more towards mortgage lending volume than mortgage lending quality.This actually does not connote that the UK mortgage lending was one that did notfollow the basic principles of lending while the data for the past 24 months shows that they were all give at the rates prescribed. While the fact still remains that the interest rates are the lowest as of now making it a potential risk for the borrowers to bear any increase in the interest rates in the next 24 months to find it hard to repay them.

The major issue faced by many of the first time buyers at the moment is that of a more tougher lending norms and deposit necessity.There are no 100% mortgages being issued right now and also d not seem to come back in the near future.At the moment the stipulation has it that the first time buyers have to put 10% of the amount of the property from their side. However, the more attractive lower cost mortgage deals require as much as 25% deposits.Now the mortgage lenders have more stringent norms what with them giving the loans to first time buyers having a good credit history and an appropriate underwriting profile as well .

So what is expected for the first time buyers with this now?. There has to be a change someday.At the moment the non-availability of first time buyers as well as the global financial crisis is the worst of its kins having an adverse impact on the UK properties.It would be very difficult if only we can come back to the earlier terms of 100% mortgage loans.In order to bring in a stability to the home loan market it is advised that that there are prudent measures that are brought forth in the next 24 months to help the first time buyers as well.

Lets hope that the UK mortgage market sees sense and starts to offer strong prospective first time buyers a fair deal so that buying a first property becomes more achievable for more would be first time buyers.

It is necessary to find First Time Buyer Mortgages and also get more Mortgage Advice from experts.