Hopeful homebuyers now need a total of £36,500 up front in order to secure a first time buyer mortgage and the keys to their first home, according to the BBC’s Newsbeat programme.
The Newsbeat report pointed out that the best first time buyer mortgage deals are reserved for those with larger mortgages deposits.
This means that a first time buyer mortgage for a £100,000 house with a deposit of £10,000 would have a hefty monthly repayment of £640, while the same house with a £25,000 deposit would have a more affordable monthly repayment of £500.
In fact, the average deposit now required for a first time buyer mortgage is much higher, at £34,000, the BBC estimates.
Immediate additional costs include a set-up fee for first time buyer mortgages deals of £1,000, another £1,000 in solicitors’ fees, and £500 for surveyor services, meaning that the average first time buyer must have £36,500 in order to move into their first home.
The normal stamp duty that was previously payable is currently suspended in the case of genuine first time buyer mortgages up to £250,000.
One positive development in the area of first time buyer mortgages is a new report this week from accountancy firm Price Waterhouse Coopers which predicts that property values are likely to remain low until at least 2015. The report estimates that at the height of the market in 2007, house prices were overvalued by 25%, but that this has since fallen to under 10% and that, since lending to first time buyer mortgages remains restricted, house prices are unlikely to rise considerably.
