First-time buyers are always going to have it rough. For the most part, it is a struggle to find the deposit necessary to get accepted for a mortgage. As if it wasn’t hard enough, it’s almost certain that the impact of 2020 is likely to have a negative impact on young people that pinned their hopes of getting onto the housing ladder in the near future. Generation Rent may be questioning whether they should even consider buying at all.
It’s not all doom and gloom though. There are still plenty of opportunities to secure mortgages, so long as you are aware of what it truly entails, and you have considered what is likely to happen to the housing market over the course of the next 12 months.
While there are a number of tools that can help to give prospective buyers the chance to evaluation their eligibility to be accepted for a mortgage, this calculator is probably the best starting place to figure out your financial responsibilities once you can finally call yourself a homeowner.
- Asking prices are up
According to Which, using a Rightmove index, asking prices for houses have actually risen by 6.6% year-on-year. This is interesting, consider so many more people are going through financial hardship. However, it’s in their interest to push for a slight premium with their properties now, because so many more people are looking to move into larger properties to facilitate lives that may involve a lot more time at home – working, playing and relaxing.
- Government schemes will soon end
Businesses are closing. People are losing jobs. Industries are streamlining processes. Since the first lockdown, the government has been putting packages together to support companies and the people that work for them with all types of schemes and – put simply – cash to see them through this difficult time. Unfortunately, that time is going to come to an end. When it does, the economy is going to be extremely turbulent – bringing further uncertainty to the housing market. Some are predicting a downward slump, while others are actually quite hopeful.
- Sales are being agreed quicker
On average it’s taking just 49 days to agree the sale of a home. For those that have had to wait month after month to get status updates on their mortgage, it will be a relief to see that the pace is well and truly picking up these days. This speedy process may be great for those involved in the sale, as more efficiency is better all-round. This speed means that there may be more turnover of properties.
- Many jobs are less secure
Being approved for a mortgage requires you to prove that you have a sufficient deposit, and will have a steady stream of income in the future to continue making the necessary payments. Right now, so many sectors are going through unprecedented changes that they’ve never seen before. For example, the events industry has been absolutely decimated this year and there’s no sign of let up in the future.
Whatever career path you have taken on, you have to be wise to the fact that lenders will be weary of those who are in sectors facing adversity through massive job cuts, furloughed staff and other hardship, as it may suggest that your income isn’t as stable as they would deem necessary.
