When it comes to the property market, we all know how difficult it is for first-time buyers to get their feet onto the bottom rung. As prices soar in London and the south east, it’s also becoming increasingly tough for those who are looking to trade up as well. Borrowers have been under a lot of scrutiny too – due to the Mortgage Market Review (MMR) rules, which were introduced in April 2014. Banks have been running intense checks which involve looking at lifestyle factors and the ability to meet mortgage payments if interest rates rise, so some potential buyers have had their applications rejected (although it remains to be seen as to the long-term effects the rules will have on the market). In a nutshell: for buyers with little to no money for a deposit, these new regulations aren’t good news – long gone are the days of 100 percent mortgages. Even those who are looking for buy-to-let options are being extensively quizzed!
So what are the options for wannabe home owners with little to no money to invest?
The main schemes on offer are the following:
– Help to Buy
– Shared ownership schemes
– New Build offers.
Here’s an overview of these options and a look at the pros and cons: