Latest News » Homeowners vs First Time Buyers
With property prices on the rise, its good news for homeowners, bad news for first time buyers. For those looking to get the leg on the first rung of the property ladder may find it difficult, especially since wage increases are lagging way behind house price increases. However the bad news does spread over to the homeowners. As house prices continue to rise, and less people can afford to buy, then homeowners looking to move, will find it hard to find a buyer. Although first time buyers will be able to raise enough funds to able to get a mortgage, this amount still might fall short of property prices.
First time buyers don’t despair. This doesn’t mean you can’t get on the property ladder. There are some advantages to being a first time buyer such as interest rates are at their lowest for over 30 years (whilst property owners over the last 20-30 years are still repaying their mortgage at higher rates than today), first time buyers are more appealing to sellers as they are not in a chain (a quick sale can be so appealing sellers are willing to decrease the price of the property) and first time buyers are sought after by mortgage lenders (as banks are eager to get you on their books).
For homeowners, the value of property increasing means that the equity in your home will increase. This means your house is worth more now than at the time of valuation during the application process for your mortgage. So now that your house is worth more, you could now think about remortgaging to release the positive equity and reduce the repayments on your mortgage. It’s a win, win situation.
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