Brits Look Abroad to Enter the Property Ladder

The young work force seem to be halting their plans to purchase their first properties here in the UK according to new surveys. This seemingly is due to the high deposits needed now during these difficult times.

The results have shown that 70% of the people surveyed
who do not own a property already have decided to now not look in the UK for their first property. Due to the difficulty in obtaining finance here in the UK these people agreed that they would consider purchasing abroad, where it is possible to stretch your money further. From the people who voted in favour of purchasing
abroad; Spain and France came out the favourites in where to look at for investment.

The Council of Mortgage Lenders (CML) said last month that first-time buyer numbers are decreasing. This is despite current changes within the UK market place, falling prices and changes to Stamp Duty. These findings back up the results from the Survey. Also documented by the Council, from the 14,300 loans filed for by new entrants in April 2010 only 35% of these were for mortgage purposes, this figure has dropped from 39% in March.

Research has shown that in the current climate a deposit of up to 25% is needed to secure a property and mortgage. This large deposit is putting many people off investing at the moment. The fact remains that purchasing abroad can be done easily if using the correct route’s and sources. These purchases can come with a far lower entry deposit and with great financial rewards.

However, Managing Director of overseas property experts, Property Prophets, Michael Johns warns "Mortgaging in other countries is not always an easy ride as we have seen banks, particularly in Portugal, Greece, France and Cyprus really tighten their belts recently.  We are seeing an abundance of mortgage deals available on the market as banks seek to find "good debt" from affluent sources, but for every ten mortgage cases we put through at the moment, seven are being refused as the banks criteria get tighter".

Most overseas property companies use a DiP Form (Decision in Principle) which enables the lender to assess whether the borrower is suitable for a loan.  This is not recorded as an official application, so if an applicant is knocked back, it has not affect on their credit rating.

"Different banks have different criteria and sometimes the criteria is not followed.  Some banks get scared by seeing a number of other property investment commitments, other banks see it as a plus point.  Some banks do not consider credit card debt, others see it as a negative.  We have seen people be declined in one bank and then passed by another a few days later in the same country, for the same amount.  A good mortgage broker will also be able to make a case for exceptional circumstances too, particularly when self employed applicants are considered".