So a major high street lender has now opened buying up to first time buyers once again. This same lender has been to blame for the starts of low credit to high lending ratios, in other words lending far too much to the wrong people, which in turn helped to bottom out the housing market.
Now this has happened I recon the rest of the high street lenders and mortgage brokers in the UK will start easing up their lending restrictions again.
Currently in the UK it is very difficult to borrow money. For example if a single person wants to but an apartment for the first time they will have a real struggle with a 10% deposit. If they have a larger deposit they may be able to get up too 3.5 times their income. Which means if they earn 40,000 per annum they could potentially borrow 140,000 UK pounds. Not very much, in London it won't get you anything but a studio flat far from the center.
Anyways with the long awaited and very much needed new offers the first time buyer will be able to borrow on a 10% deposit once again. This easing up the market and a good first attempt at bring back the first time buyers and placing them in a position to buy a property again.
The new rates offered on these mortgages is 5.5% fixed for 2 years. This is not so great considering current interest rates.
At the very worst it can help people get on the ladder as well as jump start the property market again as no doubt others will jump on this band waggon and start introducing their offers to new purchasers.
All of this is a good sign of banks, high street lenders, mortgage companies and brokers starting to consider lending money in the form of loans, finance for cars, mortgages etc., etc. This can help our economy grow once again and will have a large knock on effect with spending. Our shops have been suffering the results of a zero lending economy and it will be well received. I am not suggesting that we go anywhere close to the former path with high and easy borrowing, large credit card allowances and debts but we certainly do need a chance to once again exercise the use of credit facilities in the UK.
There could be hope for this years property market.
Author Resource:
Daniel Zane is owner of London property inventories one of the UK's leading suppliers of property inventories .
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