First Time Buyers Will Struggle For Finance Before 2010
A report into the UK mortgage sector by Sir James Crosby has raised a number of worrying points with the main one being in relation to first time buyers. Sir Crosby believes that the restriction of finance in the mortgage market will remain until around 2010 and he suggests that first time buyers with deposits of less that 25% will be hit hardest.
While there are growing calls for the authorities to step in and offer further financial assistance to the markets there is some debate on how this should manifest itself. A move to the US led mortgage system has affectively been ruled out and while a number of new ideas have been put forward none have yet received universal approval. However, the fact that new blood for the housing market will affectively be taken out of the equation will reduce activity levels.
Recent times have seen a fall in the headline mortgage rates but as yet this has not impacted in any way on the first time buyer market. Increased deposit requirements have offset much of the benefit of falling rates and the market is nowhere near back to traditional funding and activity levels. The fact that Sir Crosby expects this to continue until 2010, if left unchecked, is a major concern for all involved in the sector as well as the government.
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