Hello World! Welcome Friends! Anyone in the market for a home today is probably going to face challenges their parents and grandparents never had to deal with. This leads many of today’s younger generation to question whether they will ever be able to get on the property ladder. As it stands, it is getting trickier every year, but help is out there, so although it may be difficult, in many cases it can be done.
A Look at Historic House Prices
The real reason it is so difficult for first-time homebuyers to get on the property ladder is the way prices have grown out of proportion. With just a brief glance at one historic house prices study, it is possible to see that the cost of homes has skyrocketed well past the rise in inflation. Consider the fact that the average cost of a new home in 1980 was £27,000 in the UK.
Today that figure stands at £223,257 and with an average rise in cost of 7% each year, costs are rising well beyond the average rise in income. Or, to look at it in another way, in 1997 the cost of a home was just about 3 times that of the average wage while today that figure is more than double! As of June 2017, the average cost of a home is 7 times the average income.
Historic house prices are rising well above the rise in inflation, making it more difficult than ever for first-time buyers.
Other Factors Contributing to the Difficulty of Stepping onto the Property Ladder
So then, the prices of properties are increasing far beyond inflation and the average wage in the UK but that isn’t all there is to the story. Interwoven throughout all that is the fact that new builds are down, creating a severe shortage in available properties. Not only is this a contributing factor to the soaring cost of properties, but it is also providing a greatly diminished supply to choose from.
Mortgage lenders can be much more selective, which is then making it more difficult to qualify for a loan. Somehow, this has turned into a vicious cycle from which there seems to be no stepping off and onto that property ladder our parents found so easy to access. The key is in knowing where to find the help and advice you need.
Solutions to the Current Property Ladder Dilemma
While many young people have parents who can help them step onto the ladder financially, others don’t have that luxury. Here it is important to note that many once financially sound families lost all their savings and many of their other resources during the recent Great Recession, and the rise in insolvencies following the Brexit vote. Families just don’t have the financial resources they once had.
What many younger people are doing is to seek the help of conveyancing solicitors who have a “no sale – no fee” policy. With the help of a solicitor it may just be possible to match your desire for owning a home with your ability to pay and a mortgage lender willing to underwrite the loan. Also, government assistance for first-time buyers might also be available.
It may be hard to get on the property ladder, but with legal aid, there just might be a solution. As the old saying goes, you never know until you try.
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