The high rates offered by lenders are only causing the housing market to stagnate, one expert has suggested.
Helen Adams, managing director of property advice website FirstRungNow.com, stated that “penalising” first-time buyers with rates that are too expensive will only delay a recovery.
She said: “We need to see the market begin to move, but if lenders make it too expensive and are profiting out of borrowing cheaply and then lending expensively, that’s not going to happen.”
While those who have large amounts of equity stored in their property may be able to make forays into the housing market, many younger buyers are finding it difficult to obtain financing, Ms Adams added.
For the industry to get moving again, she remarked, the UK needs individuals at the bottom of the ladder to be able to stimulate purchasing.
A recent report by Moneyfacts.co.uk revealed that the typical two-year, fixed-rate mortgage has risen to 5.08 per cent and the average five-year, fixed-rate deal stands at six per cent.
By Francis Finch