How will your children buy a home? Part two

More tips from the Bright Blog – Mortgage Broker St Neots

It’s always difficult to make predictions about the future, particularly in any kind of financial market. The best way is to gather relevant information from the past, one of the things that makes predictions about the housing market particularly gloomy for the first time buyer. All you can really see are price rises.

But we are surely reaching a turning point if first time buyers are priced out of the market. Will that not have a negative effect and create an unsustainable market?

The Housing Market – Mortgage Broker St Neots

Not necessarily. The housing market suffered the crash along with the rest of the world in 2007 that led to 160,000 new buyers less a year. Despite this, the housing sector was quick to recover, mainly due to it still being appealing to investors (especially at crash prices).


This could even be part of the cycle. Every time the housing market crashes, it puts off new homeowners from coming onto the market as they feel they might be getting unfavorable mortgage rates. But for investors looking to sink capital into bricks and mortar, the new low prices look very appealing.

The Credit Crunch of 2007 – Mortgage Broker St Neots

Since the Credit Crunch of 2007, the average deposit has risen from 10% to a massive 25%. This is one of the biggest stumbling blocks for first time buyers and has increasingly led to people seeking help from parents and family. Given the inexorable upward trend of property prices, this is something that is set to continue and doubtlessly increase.

It seems that the answer to the question “How will your children be able to afford a house?” might be as simple as “only with your help”. Even if your offspring earn the average wage of the first-time buyer at £37,380 they may well still need help to make a deposit with increasing rental prices and utility bills.

Times have changed and where we once saved for our children’s futures, we may now need to save for their future into adulthood.

Thanks for the read the latest Blog from Bright – Mortgage Broker St Neots.

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