Reading this Motley Fool Article entitled 5 tips for struggling 1st time buyers got me thinking.
As has been pointed out, 4 out of the 5 tips rely on parents help in some way or another. Looking with a cold eye on the situation it is now almost impossible for a couple (let alone an individual) on an average income to buy a property.
A default notice was wrongly places on my credit file in 2007, this prevented me from taking advantage of HSBC’s 100% graduate mortgage… It took me a year of fighting to have this removed, and now that it is, no ones lending anyway.
I speak to many people of previous generations who tell tales of buying land in their ideal spot, building their home, or buying a place at auction for £10,000 which is now worth £300,000. Will we ever see that sort of growth in our lifetime? Not within a time-frame of 20 years as some people previously have.
So is this unfair? well… economies are all essentially lots of sets balances, one imbalance starts chain reactions creating both positive and negative outcomes, depending on who you are and what situation you are in. There will never be an economic state that suits everyone so in that sense, this is just a transitory period on the way to a greater balance.
Could policy makers make live easier for 1st time buyers, desperately wanting to get on the housing ladder? Yes – planning policies which don’t require large sums of bribe cash would be nice. mortgages made available for 1st time buyers who want to convert derelict houses, barns, churches etc…. (my parents were allowed one of these with no problem but I am not). Why should these opportunities be reserved exclusively for cash rich developers and builders when they could go towards solving a problem.
Discrimination – yes, even though I can prove a substantial income for years, I cannot get the best rates beacause of my self employed status. Also the fact any company can place what they want on your credit file with no accountability or penalty if this is done incorrectly or wrecklassly is wrong. Credit referencing needs a complete overhaul.
The only thing I should have to do to secure a mortgage is prove my income and the ability to maintain that income to a human, not a computer! What I buy with this money is my business and my risk!