First Time Buyers need more help

It is believed that first time buyers are the biggest casualties of the house price boom and bust culture with the trend continuing to this day.  The UK housing market has taken a severe beating thanks to the effects of the credit crunch.
House prices grew by more than 230% between 1996 and 2007.
Though prices have dipped down to all time low since then it is still unaffordable for first time buyers.
The difficulties lie in the context of the wider mortgage market which has substantially reduced since 2008. Gross mortgage lending has declined from £360 billion in 2007 to £136 billion in 2010 and now stands at £135 billion. This, combined with declining house prices, increasing regulatory pressures and a risk averse population, has led to a sharp decline in borrowing relative to property value.
Ongoing public sector cuts and rising levels of unemployment deter first time buyers from making big financial commitments.
A CML report indicates a doubling in the number of cash buyers since 2005, this virtually shuts out the first time buyer from the mortgage market. On average a first time buyer pays an average of 17% deposit on a house price, taking them around 29 months to save.
Help is at hand:
The importance of first time buyers in the mortgage market should not be underestimated and the problems although daunting are not insurmountable. Low or no deposit is the first time buyers preferred option for mortgages and therefore a relaxation of deposit requirements is necessary. Savings related incentives and innovative mortgage products by lenders can help but are in short supply.
Mr George Osborne has mooted plans for the First Buy Scheme primarily aimed at first time buyers.  It is estimated that the scheme will help 10000 buyers over a two year period.
Taking a fixed term mortgage will be better for first time buyers as they will not be subject to fluctuations in interest rates.
Bank of England’s quantitative easing could help them to enter the market once again.
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