Prospective holders of home loans such as
tracker mortgages are facing an increasingly difficult task to get on the property ladder, new research has shown.
According to a study published by First Direct recently (September 17th), the cost of deposits and houses mortgage customers are dealing with at present is significantly higher than income rises being seen across the country.
It was established that in the last 21 years, the average downpayment on an abode in the UK has gone up to almost 66,000 from a level of around 6,700 in 1990.
This figure is not in line with the average household income hike of 250 per cent in the same period and Bruno Genovese, senior savings product manager at the financier indicated this is why the average age of
first-time buyers is going up.
Nevertheless, Ben Wilkie of What Mortgage noted recently that struggling homeowners should consider interest-only mortgages.
An increasing number of people with home loans such as tracker mortgages could find themselves slipping into negative equity in the coming months, an expert believes.
Paul Holmes, chief executive officer of Firstrung, believes mortgage holders are potentially in quite a precarious position at present as the country continues its recovery in the wake of the recession.
These comments came after the publication of data by Homeloan Management earlier this month (September 7th), which showed that if house prices fall by a further ten per cent the number of homeowners plunged into negative equity could double to 1.7 million.
And Mr Holmes warned that while this already represents a "frightening statistic", the situation appears set to become "far worse" in the near future as the sector struggles.
However, he added: "The only saving grace is that interest rates are so low at the moment that mortgage rates are reasonably low."
People finding it tough to meet the repayment requirements on their tracker mortgage home loan still have numerous options available to them.
That is the view of Ben Wilkie, editor at What Mortgage, who believes anyone struggling to make ends meet in terms of their mortgage contract can take action to improve this situation before it becomes too serious.
For instance, Mr Wilkie noted individuals could switch their deal to an interest-only home loan as they "cost you virtually nothing with a tracker or variable rate deal" in comparison to others.
Last week (September 13th), the Financial Services Authority revealed that the number of mortgage holders in arrears slipped by one per cent to 332,700 in the second quarter of the year.
Meanwhile, this figure also represents a six per cent decline in comparison to the corresponding period in 2010 and Mr Wilkie attributed this trend primarily to the fact interest rates have remained low for so long.
