Tightened mortgage rules could delay first-time buyers
A spokesman for the Newcastle building Society has today suggested that first-time buyers who are unable to raise funds from "the Bank of Mum and Dad" will be forced to rent or remain in their parent's homes 10 years longer than their middle-class counterparts. This situation could get much worse in the short term as the financial straitjacket afforded to mortgage agreements is set to tighten.
There's no doubt that there is a need to reduce the risks in the UK mortgage arena, which many believe is behind the economic downfall in the UK and worldwide, but is it fair that these changes come in at the expense of first-time buyers?
Not only have first-time buyers seen liquidity issues impact upon their ability to join the property market but they have also seen a significant hike in deposit requirements and now we see further credit checks and financial reviews required. All in all, while the FSA has effectively been forced into this situation, there are fears that the UK property market could be strangled for the next few years.
This comes at a time when UK property prices are under pressure and indeed the outlook for the sector is not good in the short term.
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