Home buyers could get 6.5 times their salary to offset rising house prices | Personal finance | Finance
Usually, lenders offer to loan candidates four to four and a half times their salary – depending on their circumstances. However, this new mortgage deal from StrideUp will make it easier for some Britons to move up the property ladder by allowing them to borrow more.
As the cost of living crisis and rising house prices have made it even more difficult to access real estate, there could be a silver lining on the horizon for some.
Digital property finance group StrideUp is targeting the affordability crisis of first-time buyers in the UK with a new mortgage plan offering up to six and a half times a buyer’s income.
The move follows industry data that shows rising house prices have outpaced incomes, meaning the average price-to-earnings ratio for first-time buyers is 6.9 times their salary. .
This is significantly above the financing achievable with a traditional mortgage whose prices are often off the market.
READ MORE: Pensioners offered major retirement boost after years of slump
Sakeeb Zaman, co-founder of StrideUp, said, “StrideUp’s mission is to create a more affordable and accessible way for first-time buyers to climb the housing ladder and it’s never been more relevant.
“With soaring property prices and constraints on traditional mortgages, deposits are often insufficient, and at the same time people are spending more on rent and living expenses.”
This could be a viable option for those who don’t want to rely on Mom and Dad’s Bank or those who are likely to benefit from salary increases as they age.
However, this comes at the same time as new research reveals that consumer confidence in the housing market has declined.
The number of people who think now is the right time to buy a home has fallen to its lowest level (16%) since 2008 according to property tracker BSA.
Almost two-fifths (39%) disagree that now is a good time to buy a property, up from 33% in March.
The main reasons given were the high level of property prices (73%), as well as the impact of rising interest rates (70%) and high inflation (70%).
In terms of barriers to home ownership, high house prices mean collecting a down payment required to buy a property remains the most important, with nearly two-thirds of respondents (62%) citing that.
Commenting on the results, Paul Broadhead, Head of Mortgage and Housing Policy at BSA, said: “While it is encouraging to see that less than one in ten homeowners care to keep up with their mortgage payments, this is likely because it will take time for the Bank Rate to increase to be felt by most borrowers, as around 80% are fixed rates.
“Borrowers should start planning for the end of their mortgage contract, however, because while the impact is likely to be quite modest, any increase in spending in the current environment will be unwelcome.
“Most worrying is the growing number of people worried about paying their rent, which has doubled in the last 15 months.
“While the support programs provided by the government to date are obviously welcome interventions, it is clear that for many more support is needed if families are to survive the current crisis without increasing personal debt levels.” .