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Getting Creative With Property Loans

Can you afford to buy a house or have you been priced out of the housing market? In some areas, the UK housing market is booming. However, many people are finding themselves unable to afford to take that first step onto the property ladder.

For some, it's because they've had student loans. With graduates borrowing upwards of £3,000 each year to fund their university education, many are starting work with debts of over £10,000. If they've had student overdrafts or take out graduate loans, the picture is even worse. Recent research showed that at debt of £10,000 could take up to four years to repay, but 10% of graduates owe more than £20,000, delaying their entry to the property ladder even further.

Even those who are not carrying large levels of debt may find it a struggle to come up with the deposit and meet mortgage payments. Recent figures from the Council of Mortgage Lenders put the average loan for a first time buyer at £110,000, which is 3.21 times average earnings.

Meanwhile, the buy to let market is booming, some of it driven by the university factor. Students' parents are buying homes for their children to live in while they study and keeping them on after the end of the course. People are also more likely to seek buy to let loans to acquire holiday homes or simply to make an investment that will supplement their pension.

There are still a few who have fallen through the cracks, though, and a recently started campaign aims to give buyers some new power by speaking up for them. The non-profit Priced Out campaign started in February and is trying to raise awareness of the issue of affordable house prices.

Priced Out suggests that higher house prices are not always a benefit. In fact, Priced Out states that high house prices can affect the areas that people will move to for work and the decisions they make about starting a family. The campaign aims to inform people about the current state of the housing market and seeks to get prices to a fair level for all buyers.

Meanwhile, mortgage lenders are also getting creative. Some are increasing the amount that buyers can borrow, to as much as five times salary in some cases. And some would-be first time buyers are even getting on the property ladder by advertising for people to buy houses with them.