By Erin Hunter
The property market is a strange one at this moment in time. With the economy suffering the world over, there has been a real worry from many that the property market would plummet. One area of the property market that has become so difficult over the course of the last decade or two, is the fact that fewer younger people than ever before have had the financial foundation to afford a deposit and be successful with a mortgage application, as it is all just so more expensive than it used to be. The pricing out of the younger generations in large numbers when it comes to getting a foot on the property market is a real long-term worry, but with the low deposit mortgage promise from the Government, there is hope that things can begin to change for the better in the coming years.
Boris Johnson has announced that he wishes to create ‘Generation Buy’, bringing in a low deposit mortgage scheme that he thinks will revolutionise the way in which young people have access to buying property. It has become harder and harder over the years for first-time buyers to find mortgages that suit their needs and to find properties where they can realistically afford to save up for a deposit. Lenders have cut the maximum loan to values (LTVs) in recent times, which has meant that the percentage of the value of a property required as a deposit has risen sharply, pricing many people out of the property market altogether, or at the very least ensuring it takes a substantially longer time to save up a deposit.
The changes to stamp duty recently in England and Northern Ireland also helped landlords and those who own a second home, meaning there was an increase in demand from first-time buyers. This, of course, led to house prices going up and making the picture worse for potential first-time buyers.
The problem in recent years has been the sheer number of people who have been financially excluded from the property market due to the nature of large deposits for first-time buyers.
The Help to Buy Scheme was introduced with the idea of providing a government share in the losses should a borrower default on a loan. It was available for two years before being withdrawn, helping to double the amount of 95% LTV deals available to first-time buyers. Since it has been withdrawn, it has become harder again for first-time buyers to enter the market confidently, with even the cheapest local homes out of reach for a large percentage of those looking to buy. Now, with the impact of Covid too, tax breaks for homeowners could be investigated further to help the next generation to be in a position to buy, with hopefully as little as a 5% deposit.
Hopefully, we will see a much broader range of people with the financial capabilities and the option of owning a home in the future. As it is, it is important that people also see the very best of the properties on the market. For so long, property listings have been too simple in essence, providing sparse details, not enough photos or photos that are of a substandard quality and missing other vital details. As well as it being important that the younger generations have access to purchase property, it is also important that on the whole the industry changes to improve the way in which properties are packaged and listed. The higher the quality of listing, the better the chances of it being sold, and that is why so many estate agents are looking to hire estate agent marketing services to help them improve the quality on offer.
