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At a recent conference that looked at the housing market as it currently stands and what will happen going forward, many within associated industries called on the government to take action to help stimulate the troubled sector.
A number of leading experts within the property field said that return to the days of lower loan-to-value mortgages would push up the average age of first-time buyers and drive many young people who were previously stepping on to the ladder to remain in private rented accommodation.
This is obviously not brilliant news for the house conveyancing sector, which is hoping for a substantial recovery in the market after many bruising months of inactivity.
Willing to lend
In the wake of last year’s collapse at Northern Rock, where scenes reminiscent of the classic film ‘It’s a Wonderful Life’ were shown nightly on the news involving hundreds of savers and investors queuing around the block to withdraw their money from the failed institution many lenders have become increasingly cautious to lend at reasonable rates.
“The government's fears of a repeat of the Northern Rock fiasco, where savers queued around the block to make withdrawals, have driven lenders to stockpile money which could otherwise be lent,” said Michael Coogan from the Council of Mortgage Lenders.
This policy, which most experts agree will make it tougher for first-time buyers, may actually be necessary for the foreseeable future, with banks and other major lenders needing greater reserves of capital to prevent future collapses.
“Once the dust settles, it will be sensible for institutions to have substantially more capital than was thought necessary before the credit crunch,” confirms David Miles.
For young people especially, the availability of 100% mortgages has all but disappeared and now unless you have a large sum of capital to use as a deposit, finding a mortgage is a tough business.
“Reduced loan-to-values will bring about an increase in the age of the average first-time buyer, as we return to a culture of saving for deposits. This will probably mean that the private rental sector will need to expand through private buy-to-let landlords or professional investors,” said David Miles.
That’s not to say though, that there aren’t deals out there if you prepare in advance and get together decent deposit to make your dream purchase come true. It is also possible to save money in other avenues such as licensed conveyancing, which will take a little of the financial edge of your purchase.
Searching for conveyancing quotes needn’t be an overly taxing exercise but it is best to shop around to find the best deal possible rather than automatically doing business with your local buying house solicitor. Using online conveyancing services who deal with a large number of clients could well end up saving you money in the long-run.
Online conveyancing services will usually offer you a facility to track your case, so it needn’t be a case of simply paying your money and hoping for the best, but instead you will be able to see the progress your application is taking at all stages.
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