Despite the troubles in the home mortgage market, experts are encouraging young people to think about buying their first home instead of renting. Low property values have made it a good time for those that can get a home mortgage, but rates do remain high, at least for now.
“Now is a good time to buy because, if properties bottom out as I think they will by the end of this year, sellers might not be so willing to drop their prices next year. If you are prepared to take a five-year view, there is no doubt there are some real bargains around,” says Ray Boulger of John Charcol. ‘There is always a risk, too, that the valuer will be cautious and come in at below the agreed price. Some lenders insist valuations on new flats are done by their in-house valuers where they have more control. With older properties there shouldn’t be a problem.”
‘If you want to buy a new-build flat on a buy-to-let mortgage you could have some difficulties because the lenders are wary of these properties. But if it is an older property and just classed as a second home, there shouldn’t be any problems,’ says Ray Boulger of mortgage broker John Charcol. Birmingham Midshires and Bank of Scotland will still lend up to 75% loan-to-value on new flats but others are more cautious and you may need a deposit of up to 35%,’ added Boulger.
Related reading: Home Mortgage
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