Loan Availability Looking Up For First Time Buyers
Over the course of the past two years, or more, it has been particularly difficult for anyone to be accepted for a new loan of any kind, with home owner loans being no exception unless a potential borrower has a perfect credit rating and a large deposit.
The much tighter lending criteria from lenders with regard to loan to value ratios and who they are prepared to lend to has made it even harder for first time buyers to get themselves onto the housing market with an affordable home owner loan or mortgage.
But new research conducted by moneyfacts.co.uk has brought some good news for potential first time buyers, who may have previously been deterred from entering the housing market. According to the research, banks and building societies have steadily been relaxing their lending criteria and increasing the maximum loan to value they are prepared to offer.
In May last year, there were only 84 different loan products which offered a loan to value of up to 90 per cent, however this has now almost doubled, to reach 153 and lenders are introducing new loan deals all the time, making home ownership a more attractive and affordable proposition for many individuals who simply could not afford to buy a home in the recent past.
The latest house price survey from the Halifax has shown that the price of an average property has increased by around £10,000 since last May and this news, coupled with the fact that funding is slowly becoming more available on the wholesale money markets, is making high loan to value loan deals less of a risk for lenders and therefore allowing them to start offering a new range of more competitive cheap loans to the sector of the market who need them the most.
