Manchester Property News

First time buyer mortgages must adapt

David Boyd Sep 7, 2011, 02:43 AM

There have been seismic changes in the UK economy and housing market during the last decade, however the available mortgage products for first time buyers have hardly changed from the time I was looking to purchase my first home.

First Time Buyers haven't suddenly become a greater risk to the banks in recent times but their needs have changed. The solution isn't to make loans unavailable or unaffordable for this group of buyers, but to adapt these products to today's reality,

Firstly we are all living longer and perhaps more importantly we are going to be working longer. Longer mortgage terms are needed to reflect this new reality 30 to 35 year mortgages are available but these need to become more available for first time buyers.

Flexibility. Mortgages need to be far more flexible with mortgages breaks available perhaps one month every year to help during the difficult Christmas period. Again such holiday breaks are available in some products, but need to be more widely available.

Rate security and flexibility. Variable rate mortgage products need to have the flexibility to switch to fixed rate products any time during the term of the mortgage without any penalty. Such mortgages are beginning to appear.

Overall banks need to alter their approach from an adversarial short term approach, hoodwinking buyers in straight jacket mortgages, confusing first time buyers with complex fees and rates which eventually cripple their finances, to a sensible look at the long term requirements of first time buyers and providing products that meet the needs of this group of buyers. Ultimately this will result in long term stability for the banks, lower risk of default, and therefore feedback in sensible rates for first time buyers.

Load more comments
Thank you for the comment! Your comment must be approved first

Join our Newsletter

About The Blog

This Blog looks at what is happening in Manchester, the property market, events and community news along with investment ideas and tips for those loosing to invest in the area. 

Tom Simper - Editor

TomS - Head

Manchester is one of the fastest growing markets in the country.  If you need any assistance buying, selling or letting properties in the area we have over 30 years of experience and local knowledge to help.

T: 0161 441 0563
E: [email protected]

"Denise was so helpfu"

- pAUL

"The best estate agents I've used in Manchester"

- Lawrence

"Jamie was excellent through the sale of my property I cannot fault him"

- P

"Property Management"

- Ashok

"Emily and Manish both very helpful"

- Chris

"Absolutley Perfect Service"

- Jonathan

""A" Team at Salford"

- Sanjay

"professional and friendly"

- Carole