The perception is that being a first-time buyer isn’t fun. Soaring house prices, tougher lending conditions and general uncertainty about the economy have made lenders and borrowers more cautious.
However, even though it’s still harder to obtain a mortgage today than it was 15 or 20 years ago, things are looking up. According to the Financial Conduct Authority’s (FCA) March 2019 report, new mortgage commitments were up by 4.6% compared to the previous year. In simple terms, banks are lending more money than they were.
Buying in Lincolnshire might be easier but it’s not easy
For buyers in Lincolnshire, the problem of financing a first home may not be as pronounced as they are elsewhere in the country, but it’s still not a formality. As of May 2019, Zoopla pegged the average house price in the region at £201,783. Compared to London’s £473,822, that’s clearly not a bad deal. In fact, Lincolnshire’s prices are just below the national average of £247,886. However, even that amount is far from pocket change.
Unless you’re sitting on a pot of gold and have an above average income, getting a mortgage for £200,000+ isn’t always easy. However, it’s during tough times that innovations are born and changes happen. Over the last decade, government officials, lenders and, more recently, private companies have been working to make borrowing easier. On the bank’s part, eligibility rules have been relaxed. Similarly, the government has stepped in by authorising help to buy schemes. However, one of the most interesting innovations has been the growth of smart brokers.
In years gone by, mortgage advisors and brokers would simply pick products from a small number of partners. Because these companies often received more commission from certain providers, the advise they offered wasn’t always the best. Today, however, intelligent software makes the process more objective and, in turn, more efficient. For example, online mortgage broker site Trussle uses smart algorithms to compare 12,000 products. Rather than suggesting matches based on a predetermined business model, the software uses multiple data points to find suitable products.
Innovation and Regulation Working in Unison
In tandem with initial searches, the software also monitors the mortgage market for the latest products. As well as giving users access to a real-time overview of the lending sector, products such as this sync with the government’s push to improve the industry as a whole. Following a review of how advisors were handling mortgage applications, the FCA found that 30% were failing to find clients the best product. In light of this, new rules have been proposed through which advisors will have to clearly explain why certain mortgages are being suggested over others.
The end goal is to not only get consumers the best deal but clean up the mortgage market in general. By making sure everyone has the most suitable product, lenders and borrowers will be under less pressure. The upshot of this should be a more stable market that’s more conducive to lending. Therefore, even though you may still find it hard to buy a home in Lincolnshire as a newbie, things are improving. Through a combination of regulation and innovation, your odds of securing enough cash to purchase a property are starting to swing in your favour.