The Dilemma Faced By First Time Buyers
Gordon Brown told us when he was a prudent Chancellor for 11 years that he did not want an economy that went from Boom to Bust and back again.and his new Chancellor are now practicing the Big Bang Theory with our Economy. Their new theory of Boom and Bust and then BROKEN seems to be affecting pensioners, savers and first time buyers
Our Banking system is in melt-down, the Bank of England must be running out of money as all it has done for the last month is pump billions of pounds of money into the money markets and now the banks are being bailed out by the government to the tune of £50 billion for the nationalisation of Bradford and Bingley. Wow! It is amazing that the bankers who created this problem and who earn hundreds of thousands of pounds a year and more in earnings and bonuses are now being bailed out by the man in the street who earns £20,000 a year, thanks Gordon and Alistair
Just over three weeks ago Gordon Brown and Alistair Darling unveiled a £1bn package to stimulate the housing market; however it seems that this has had little or no impact todate.
Most first time buyers will probably find a mortgage at 90% loan to value; this will mean that they will need to find a 10% deposit. With the average house costing £170,000 a first time borrower will need to find £17,000 just for a deposit. First time buyers are finding that they now need to add around £2,000 to £4,500 to their deposit for solicitor’s fees, search fees and valuation fees. Thanks to Gordon Brown and Alistair Darling they will not have to pay for Stamp duty on a home costing £170,000. So it will cost the average first-time buyer in excess of £19,000 for their first home
First Time Buyers look to The Bank Of Mum And Dad for a Deposit
But where are first time buyers supposed to find this kind of money for a deposit on their first home? It is highly unlikely that they will have saved this kind of money and they will find it impossible to borrow their deposit from the bank. First time buyers could look for some of the 6,000 shared ownership mortgages that were part of the government incentive earlier this month or they could look to the Bank of Mum and Dad if they are fortunate to have parents who are able to help them
The first time buyers were the very people the government were looking to in order to lead them out of the current situation and to get the housing market moving. But they just simply cannot afford the deposit and then the banks don’t want to lend them any money.
Latest Statistics Do Not Look Good For First Time Buyers
The latest statistics for the mortgage lenders are showing that over a year ago the mortgage lenders were arranging over £10 billion of mortgages a month, in July this year that figure dropped to £3 billion and this month has seen it drop to £143 million, Yes you read that correctly it was £143 million.
The banks just don’t seem to want to lend money to each other, they don’t trust each other and we are on the verge of high inflation, huge pay demands by workers and rising food and utility costs which it seems is the bitter tablet we will all have to swallow in order to resolve our dilemma within the world economy
Your thoughts and comments about first time buyers are very welcome.