Mortgage rates hinder first-time buyers’ homeownership dreams

Mortgage rates hinder first-time buyers’ homeownership dreams

0:03 AM, 11th December 2024, About a month ago

Text Size

Mortgage rates remain a big barrier to first-time buyers in the UK, research reveals.

The Mortgage Advice Bureau says that two in five (42%) first-time buyers believe that mortgage rates will make it harder to purchase a property.

And more than a quarter (24%) worry that rates won’t drop fast enough for them to afford a loan.

Almost a third (31%) are worried about being able to manage monthly repayments.

First time buyers face challenges

Danny Belton, the head of lending at Mortgage Advice Bureau says that while first time buyers face challenges, here are opportunities to be had.

He said: “Rates have risen since the summer as shifts in the global economic environment have driven up borrowing costs for lenders.

“And it is understandable that higher mortgage rates cause concern for first-time buyers, but they shouldn’t put off their homebuying dreams.”

He adds: “Deals are still available and innovations like rental recognition products and a growing market for higher loan-to-value mortgages are helping first-time buyers to get onto the property ladder.”

Drop in mortgage rates

Despite a drop in mortgage rates throughout the year, 29% of first-time buyers still cite them as a major obstacle to homeownership.

After a summer of optimism fuelled by falling rates, autumn has seen a slight uptick.

Market predictions of a prolonged period of higher interest rates have led lenders to reprice upwards – potentially impacting first-time buyers making purchases.

Mr Belton said: “For those planning to buy next year, starting early is key.

“Locking in a rate now doesn’t mean missing out—if a better deal emerges when you make an offer, you can switch.”


Share This Article


Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More