If history serves as a measuring stick, it will be several years before the property market in the UK becomes welcoming again to first time homebuyer who is now struggling to get on the property ladder.
Several problems have made it difficult for first time homebuyers more so than others. Nationwide, one of the largest lenders in UK is now requesting at least a 25% payment on a property purchase to secure a loan, and nearly all lenders are no longer willing to offer 100% loan to value.
Projects designed to cater for first time buyers, such as the trendy new flats have been popping up everywhere. However, with supply greater than the demand and prices cooling off, property owners looking to sell are already forced to reduce prices in order to liquidate their property purchase.
The only group that stands to benefit from such a scenario is the buy to let market, due to the continued requirement that landlords will need to provide, these would be homebuyers a place to live.
In the last market downturn, which starting in 1989, it took nearly 5 years for the market to bottom out and therefore become more affordable to the first time buyer. With a similar pattern emerging today, it could be a long time before the UK market becomes affordable once again.
