The dream of owning a home seems to be fading for potential first-time buyers due to the affordability crunch. A recent Barclays survey revealed that only 22 percent of people aged between 18 and 34 believe that owning a home is a feasible goal.
Skipton Building Society is making strides with its "track record" mortgage, which acknowledges a borrower's rental payments when considering them for up to 100% of the property's purchase price. Parental contributions remain crucial for many first-time buyers, a fact that hasn't escaped lenders' notice. Barclays, for example, has introduced the family springboard mortgage, allowing for 100 percent borrowing with the support of a family member or friend's cash as security.
Tim Bannister, Rightmove's property specialist, commented: "Stretching to a longer mortgage term will increase the overall cost of the mortgage due to higher interest payments, but for many, the reduction in monthly payments can be the difference between being able to afford the home that they want or not."
Richard Donnell, executive director at Zoopla, observed: "The big trend in recent years is to borrow for over 30 years to get that extra 5-10% of buying power but at the cost of paying more interest over the life of the loan." He advises that prospective first-time buyers should concentrate on identifying areas where they can obtain better value for their money.
He added: "Building a rapport with an agent can help you to get ahead in your search and gain some great tips." Donnell also advises prospective buyers to have a mortgage in principle agreed before viewing properties so they know exactly how much they can borrow.