If you believe everything you read in the papers or hear in the news you could be forgiven for thinking that mortgages are hard to come by and that lenders are not lending, I hear this all of the time from people. Well, I am here to tell you that this is not the case, at all.
It’s all good.
The mortgage market is buoyant and mortgages are freely available. The main constraint continues to be where someone has very bad credit and then you might argue they are not fit to have a mortgage anyway. The market has bounced back from the lending constraints of the last 4 years and loan to values are pushing 95% for first time buyers in Bristol. There are lenders offering to pay for stamp duty up to £250,000 and the government are offering real incentives in the way of the ‘Help to buy’ scheme which offers an initial interest free deposit of up to 20% of the property value.
There are no properties?
It seems the biggest problem for First time buyers or indeed second time buyers is that property is coming on to the market one week and is sold subject to contracts the week later. Based on what our clients are telling us you need to keep on the ball and be speaking to the local estate agents and property websites to keep an eye on new property coming to the market. The planned new 2,500 homes in Emersons Green is great news for Bristol Click here for more details. Fox Davidson are able to have a mortgage agreed in principle in 20 minutes and a mortgage offer currently takes anything from 2 – 3 weeks depending on the lender.
I do believe that there is a battle out there for First time buyers who are up against other buyers but also Buy to let landlords looking to buy a property to rent out – maybe you have your own experiences of this?
Mortgages are not affordable?
It is true that for First time buyers buying on their own, average house prices are beyond average incomes (using lenders affordability calculators) but that does not mean it is not possible to buy.
If we look at the average property value of an average first time buyer property, say a terraced house or flat, then www.zoopla.co.uk tells us that in Bristol the average terrace house is £185,199 and the average flat is £171,128.
The average employed income in Bristol according to www.payscale.com is £24,297 and a lot of lenders will lend around 4.5 x income (subject to credit score) and therefore the maximum mortgage for one person would be £109,336 plus deposit which will not buy you much in Bristol, however there are further options available such as buying with a friend or family. Alternatively if you are in a professional job such as a trainee lawyer or solicitor with a clear increasing pay scale Fox Davidson can secure a guarantor mortgage whereby a parent or guardian can have their income included before lenders calculate affordability (debt is also taken into account).
Many a first time buyer in Bristol are buying with partners and that would give an average joint income of £48,594 and an approx. affordability (using lenders calculators) of £218,673 plus deposit which is easily sufficient to buy an above average property in Bristol.
Our advice at Fox Davidson would be to speak to us first to ascertain how much you can borrow, what costs are involved to buy and what your repayments may be for the mortgage and associated protection. We can get an agreement in principle from a lender and you then have the confidence to know that when you do find a property and have an offer accepted we can move quickly to get the application submitted and valuation instructed.
Owning a property in Bristol may be more achievable than you perhaps first thought!
All views in this blog are those of Wesley Davidson & Sarah Fox-Clinch, directors of Bristol mortgage broker Fox Davidson. You may have your own views, we would love to hear them – Fox Davidson 0117 9789950 [email protected]. Head Office: Merchants House, Wapping Road, Bristol BS1 4RW