The UK is currently experiencing one of the largest housing booms we’ve ever seen, and many people are concerned about what this might mean for them when the time comes to get a mortgage and invest in property. While prices stagnated considerably over the last ten years, what we see today is a little troublesome. Of course, if you already own a home, it’s great news, as you can sell the building and make a significant profit. However, the same cannot be said for those buying for the first time.
We all know how difficult it can be to get a large enough mortgage when you’re young, even if you plan to live with a partner and you’re both in full time work. So, with the recent boom in mind, it’s pretty safe to assume things are going to get even more tricky. Considering that, we’re going to take a quick look at some of the main ways in which the current rise in prices might affect first time buyers. So, have a quick read through all the points below, and hopefully you’ll come away with a better understanding.
As a way of combating the situation you face, most mortgage providers are now offering young people the option to pay their debt over a longer period. Unfortunately, that means the interest rates payable are inflated somewhat, so it’s a worse deal than you were getting before. Even so, if there are no other ways of getting your foot on the ladder, this could be the best solution to your housing problems.
Buy to let
With the boom in mind, many young people have realised that it might make sense to stay at home with their parents for a while longer and opt for a buy to let mortgage. Sure, buying a property like this and renting it out to tenants requires a lot of research, but it means you will own a home without having to pay the bills. Websites like http://www.discountlandlord.co.uk/ offer the best possible deals at the moment, so if you need to save money, that’s a good place to start.
One of the main problems with buying a property during a boom is that it could reduce in value within a couple of years. That means your investment could turn sour, and you might end up owing more money to the bank than the house is worth. It is difficult to avoid that happening, especially if you need to find somewhere quick, and so it’s a good idea to opt for a property within the lowest range of your budget. If you do that, and the price does come down considerably, at least you won’t be completely out of pocket.
You should now have a clearer picture of what the housing boom means for first time buyers. At the end of the day, you shouldn’t worry about it too much as we all have to start somewhere, right?