The first rung is the hardest

The news has naturally focused on major events of late, what with the Royal Wedding and the US catching up with Bin Laden at last but of course none of this makes a great deal of difference to the day to day lives of most of us.

If you’re someone who has yet to take that first step onto the lowest rung of the property ladder, you’re probably wondering how you can ever go about it. If you’ve been brought up in circumstances which made you believe that property ownership is the norm, it’s likely to make your view of the prospects even worse. Much will depend on your preferred lifestyle and how important home ownership really is for you on the achievement scale.

There’s no point in denying that it’s not easy to make it happen these days but the situation is improving slightly. To start with, prices are coming down to some extent. A piece in the i paper on Monday talks about prices falling again later this year as a consequence of increased supply and lower demand. Whilst this is of course merely a guess at this stage, there is no doubt that, at the moment, prices are rising (slightly) only in London and falling in other areas. There is still a north / south divide too.

Lending is relaxing a little, albeit cautiously, with 90% LTV being achievable again but of course you have to remember that this sort of loan will be at a more expensive rate than one given to a buyer with equity in a property. Rates generally though are better than they have been at many times in the past.

The best solution to all of this is to save a significant deposit. This sounds daunting but for aspiring first time buyers still living with parents or in relatively cheap accommodation, it’s really not impossible, particularly if you live in a part of the country where property prices are more reasonable.

Shared ownership schemes have been on offer from housing associations for a while and the Government’s First Buy initiative seeks to expand on this. You can find a small deposit, get an equity loan for up to 20% and then a mortgage for the rest at an affordable Loan to Value percentage. There are potential drawbacks to this scheme but it will help a small number of people.

More comprehensive action is needed to help people on to the property ladder and it is to be hoped this is still under active consideration.

In the meantime, there are possibilities and we would be very happy to help you with independent advice on your best plans, taking into account a detailed analysis of your own individual circumstances.

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