You'll never be able to afford a home by Finance News Bulletin

Published: 10/05/07

unparalleled buyers will see the dream of home ownership slip further from their reach this week when the Bank of England raises interest taxA rise in the cost of borrowing is seen as a certainty and will shove the bank speed from 525% to 550% or even 5

75% if the Bank decides that decisive action is essential to tackle the threat of inflation Either way, the bank speed will be back at levels not seen since 2001This will be a body blow to families and youthful people already struggling to get a grip on the property ladder The situation is so tough that millions of nowadays's over-30s will never be able to afford their own house and will live out their lives in rented accommodation

Nicholas Leeming, manager of online property company Propertyfindercom, said: 'Home ownership is lessening in the UK as more people decide, or are forced, to rent We approximation that around 31m of today's over-30s who had predictable to retire in their own homes will actually live out their golden existence in rented accommodation

'Yesterday, figures from the Council of Mortgage Lenders (CML) showed that first-time buyers spent an standard 183% of their gross income on mortgage interest payments in demonstration - up from 16% the same month last yearThe rise, which mainly reflects increases in interest rates, means that the amount of first-time buyers' salaries taken up by mortgage expenditure is at its highest level since early in 1992The CML information also show buyers are now forced to borrow an standard 3

31 times their income to buy their first house This compares with 315 times a year agoThe growing cost of buying a house is preventing many from entering the market: the number of first-time buyers cut down to 33,100 in March, down 8% on the same month in 2006

CML director-general Michael Coogan supposed: 'Affordability constraints continue to be a barrier to home-ownership for many unparalleled buyers Mortgage lenders are trying to assist by offering innovative products where suitable, but will want to ensure lending remains prudent'The Royal organization of Chartered Surveyors (Rics) which is one of many organisations predicting a rate rise tomorrow, says unparalleled buyers now face huge barriers to home ownership 'They have to put aside big amounts for deposits, stamp duty and fees and then must spend an ever-increasing share of their profits servicing the massive mortgage needed to buy a house,' said Rics senior economist David Stubbs

'With higher interest tax on the way, the situation looks certain to get worse further in coming months'Three interest rate rises over the history 12 months are already having an impact on borrowers Mortgage expenditure have increased 15% in the history year as consumers' income is squeezed, a survey by the Woolwich showsstandard mortgage payments in England and Wales reached £590 in April, up £78 on the same period last year

The average household is now expenditure 199% of their take-home pay on their mortgage expenditure - the uppermost figure since Woolwich started recording the data in January 2002, when the average spend on mortgages was 159%Not only will they have to live their golden years paying rental fee, their pensions have been shattered by this government, thus making the renting situation unaffordable as well

This is a ticking time-bomb for our age groupVHR except you're renting probably from someone who probably has a BTL BTL are now over 1 in 4 houses sold It is the eagerness of many to own a second home to make easy money hire it out that is helping to force up prices and effortlessness out FTBs

Higher interest rates alone will not solve that problemnear to the ground interest rates encouraged people to extend themselves to buy more and more possessions leading to a shortage which in turn caused the prices to go up A correction is needed and higher interest rates will power many of these investment buyers to sell up freeing more housing store, flooding the market and forcing prices back down to an reasonably priced levelHouse prices have greater than before as people have been willing to borrow more - if all first occasion buyers refused to buy unless the price was realistic think rebuilding costs vs present purchase prices) then prices would drop dramatically

FTBs have the power to change the situation, however they are being played by the land agentsSelect a loan term 12 months (1 year) 24 months (2 existence 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 existencePlease select a type of insurance Life insurance Home and contents automobile Breakdown armed forces Health - medical Health - dental Travel Pet - dog favorite - cat GOThinking about investing in property This is Money has the most excellent information and advice on buy-to-let

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