A historically high number of first time buyers are collapsing under the weight of their home loan repayments and future prospects, new information reveals.
According to one source, typical repayment figures for new homeowners within the UK have increased by more than double the rate in which gross annual earnings have increased. It is thought that more than 50% of FTB’s are now classing their financial situation as critical.
To rub salt further into the wounds, home loan repayments are continuing to rise despite BOE attempts to control rates through further reductions in base interest. In addition, analysts fear that a prospective fall in house prices will further worsen an already desperate situation, as indebted homeowners fall into negative equity.
One expert commented that both British homebuyers and homeowners were in for a bumpy ride over the next few months. The majority of new homebuyers have all but admitted defeat in their attempts to find a property that falls within their budget, whilst at the same time securing a competitively priced mortgage. On the other hand, individuals who were able to secure a property pre credit crunch are now fearful of their position amidst rising mortgage rates and uncertain market conditions.
