First time buyers decide to wait it out
September 20, 2007
First time buyers decide to wait it out
According to recent reports many first time buyers in the UK are deciding to play it safe when it comes to purchasing a property.
Soaring property prices and rising interest rates have made many first time buyers think twice about rushing into property purchase, although many have sunk themselves deep into debt and borrowed off family members in order to get onto the property ladder. However, it seems that more and more first time buyers have decided that their best bet is to wait it out and see what happens with both interest rates and property prices.
For the past few years property prices in the UK have been soaring, making the prospect of homeownership impossible for some people. In addition to this potential buyers have been hit by five interest rate rises in the past year, each of which was 0.25%. This has seen the interest rate rise from 4.5% last August to 5.75% by this August, reflecting a total rise of 1.25%, and adding a small fortune onto the monthly repayments on many homeowners’ variable rate mortgages.
There has already been some good news for first time buyers, with a number of lenders recently announcing that their fixed rates are coming down slightly, which to many signifies that interest rates have peaked. There could be more good news, with some professional predicting that house prices could start to come down towards the end of the year. This is why, according to some reports, many first time buyers have decided to rent for a while and wait to see what happens with both interest rates and house prices before making a long term mortgage commitment.
Alan Wright
20th September 2007
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