This article is about the options given to a first time buyer under the current market conditions.

I reviewed a recent article in a local newspaper about two boroughs in the East London area being outlined as the most popular in London for first time buyers. This was published in a report by the Royal Bank of Scotland’s ‘First Time Buyer Index’ which was released earlier this month, highlighting Bethnal Green and Newham as the most popular areas.

This report interested me as further reading showed the average house price for Bethnal Green to be £240,287 and Newham to be £210,540. As a mortgage advisor these numbers always make me think of the sort of deals I could offer my first time buyer clients.

First time buyers usually state the lack of a deposit or insufficient income as being the main hurdles to purchasing. Their first port of call is usually their high street bank. The inflexibility of the products on offer creates another apparent hurdle, for example low income multiples and the requirement for a substantial deposit.

However, because of enhancements in product ranges and lender competition there are now many more options available to the first time buyer. First time buyers have often inherited their house buying habits from their parents but the mortgage market is a vastly different place from what it was a generation ago. We can now source products that offer:

• High Income Multiples
• Borrowing up to 125% of the property value
• Accepting gifted deposits
• Guarantor mortgages

Particularly in London, because of high house prices, sometimes the above still is not enough. Government led schemes allow the buyer to get on to the property ladder through key worker or shared-ownership schemes. These schemes are available via special grants from either the government or local housing associations, allowing the buyer to own a percentage of the property with the option of increasing their share in the future. I will discuss these schemes and the finance options available in the next issue.
 
If you would like to ask any questions about this issue you can email me at the following address: propertymart@themortgagetimes.com

James Smith is a marketing executive for Mortgage Minds.
Mortgage Minds is an independent mortgage proposition, a division of the Mortgage Times Group Limited. The Mortgage Times Group Limited are authorised and Regulated by the Financial Services Authority (303007)

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