Why is it when the Government are trying to help people get on the housing ladder with the increase in the discount available to tenants, a great many lenders have pulled out of lending in that sector?
Part of the problem maybe that clients who wish to purchase their property under the RTB scheme are normally looking to borrow 100% of the discounted purchase price, and in most cases are looking to borrow extra funds for home improvements.
With this mind, lenders may be wary that if the client has not put any of their own money into the property that if they run into financial difficulties they are more likely to walk away from the problem. In the absence of any real data it would be difficult to make a comment on this.
The other issue is, in the event of a repossession, would lenders have more of a problem selling a property and recovering their money in an area that may still be predominately Local Authority owned? In this very fragile market I think the answer would almost certainly be yes, which may explain some of the lenders reluctance to lend on RTB’s.
This not what we want to hear as we need any stimulus that we can find to bring back that feel good factor to the property market and see a positive ripple move across the property valuations. I do not think that surveyors are helping themselves in this market by constantly chipping away at the property valuations. Nobody in their right mind would expect a surveyor to overvalue, but starting each day with a positive mindset may help. The market has to turn at some stage, and it will start from the bottom up, so we have think and be positive about where the market is going.
Would some lenders please think again, we need an active and positive RTB market, which for many clients maybe their only route to owning their own property. It does work, drive through any council owned estate and those properties that have been purchased by the tenants stand out like a beacon, with the changes and improvements that they have made with pride.
With the discount now as high as £100,000 if you live in London and £75,000 outside, what a fantastic bargain and a real incentive to get on the property ladder. We need this market to remain active and would encourage any tenant to explore the possibility or purchasing. Talk to your Local Authority to find out what discount you may enjoy, and then call us on 08452 605506 to see what mortgage plans are open to you. We are here to help and advise you, and we do not charge any up-front fees.
For more information on Bad Credit Mortgages or general mortgage advice then why not visit A Mortgage 4 You.