Housing Crisis: Squeezed out of the property market


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Cover supply hit its lowest in 14 years while demand keeps increasing

Home-ownership merits have hit their lowest level for almost three decades as sky-high quotations and a shortage of properties squeeze buyers out of the market.

Existing homeowners may compel ought to benefited from spiralling values, but young buyers are being laboured to take on ever more daunting mortgages to climb on to the property ladder.

Scads existing owners are trapped because they cannot afford somewhere bigger, while in a dither lenders are rejecting a growing number of applicants because they are self-employed or deemed to be too old. Britain was one time a nation of homeowners, but now we are increasingly a land of bitter and frustrated tenants.

So what can you do to sidestep becoming yet another victim of the housing crisis?

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The self-employed comprise difficulties getting approval for mortgages

Home ownership in England peaked 13 years ago in 2003, when 71 per cent owned their snug harbor a comfortable, according to the latest English Housing Survey. The number of owner-occupiers collapsed to a 29-year low of just 63 per cent in 2013/14, the current period for which figures are available.

Soaring prices are rtly to responsibility and there is no sign of respite, with January seeing the biggest monthly be taught since 2002, up 2.5 per cent to push the cost of the average peculiarity in England and Wales to £191,812. Values rose by 7.1 per cent in the year to January and by 13.9 per cent in London, where the average enterprise now costs a mind-boggling £530,409.

Although the Government has pledged to boost housebuilding, providing remains inadequate for the UK’s swelling population.

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The property market is bulldoze out older borrowers

Brian Murphy, head of lending at the Mortgage Suggestion Bureau, says: “Insufficient property supply will continue to keenness up prices unless we build more new homes.”

Supply has now hit its lowest consistent in 14 years, according to the National Association of Estate Agents. Yet enquire has increased by a fifth since December, as investors rush to beat Chancellor George Osborne’s three per cent surcharge on label duty for buy-to-let properties and second homes.

This will thrust up the tax on a £250,000 property from £2,500 to an even more punitive £10,000 from April 1. Osborne declares his tax assault on buy-to-let will help first-time buyers, but in the short-term it is strain prices even higher.

The property market is also forcing out older borrowers, with new check out showing that applicants over 40 are being turned down by lenders who fear they intention not be able to clear the debt before they retire.

A man looking at an estate agent's window GETTY

Home-ownership clips have hit their lowest level for almost three decades

Unsatisfactory property supply will continue to drive up prices

Brian Murphy

Ian Gibbons, postpositive major mortgage broking manager at Nottingham Mortgage Services, which demeaned the research, says applicants have even been rejected because their accomplice was too old.

“It is baffling for people in their early 40s to be told they are too old to have a mortgage, exceptionally given that growing numbers will be first-time buyers.”

The cause army of more than 4.5 million self-employed workers can also competition to get mortgage finance unless they have been in business for years.

Adrian Moloney, kingpin of sales at bank Kent Reliance, says: “The self-employed make up an increasing dimensions of the modern workforce yet brokers find it hard to arrange loans for them.”

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Consumers are fighting a losing a battle with wealthy foreign investors

Acknowledged all these challenges, no wonder Bank of England figures show that wellnigh half of all families that do not already own their home believe they settle upon never get on the housing ladder, especially since many buyers, specifically in prime spots such as London, are fighting a losing battle with in the money foreign investors.

The good news for those who can get finance is that with mean rates now held at 0.5 per cent for exactly seven years, mortgage gauges have never been lower.

David Hollingworth, broker at London & Woods Mortgages, says the first hurdle first-time buyers face is advance a big enough deposit. The Help to Buy Isa can help by giving young buyers a Control top-up worth up to £3,000 if they save regularly themselves.

Hollingworth signifies: “This should at least help their deposit keep in strike with rising house prices.”

Mortgage rates for borrowers with everyday deposits of just five or 10 per cent are also more competitive now, he asseverates: “Hinckley & Rugby Building Society offers a two-year fixed scold charging 3.55 per cent to 95 per cent loan-to-value (LTV) with a £199 fee. Newcastle Erection Society and HSBC also offer attractive rates.”

He adds anybody who has been rejected a mortgage should consider using an independent broker to search the furnish for more flexible lenders. This also applies to older borrowers who deliver been turned down.

Lenders all set different age limits, for example, Barclays, the Picket Office, NatWest and RBS may lend to age 70, depending on your circumstances, while Halifax, Nationwide, Santander and Virgin Wampum can stretch to 75.

Hollingworth says: “Family, National Counties and Bath edifice societies do not have a maximum age limit and will consider each what really happened on its merits.”

Simon Tyler, broker at Tyler Mortgage Management, verbalizes Halifax and Metro Bank are also taking a more flexible chat up advances to the self-employed and contract workers.

He adds: “With record numbers now self-employed this call is too big to ignore.”

More than seven out of 10 borrowers now use a broker and this is very likely your best bet to find a mortgage if you are one of the dwindling band who still hallucinations of owning a place of your own.

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