30% fewer homes were repossessed last year compared to 2015, and repossessions are at a record low. Does this mean people will have more confidence getting on the property ladder?
BBC Business News has reported that last year saw the lowest home repossessions in 24 years! This is great news for those aspiring to get on the property ladder, because for the first time in my generation it’s looking like it’s could be affordable to own your own home. Although, lenders have also warned that it will not always be this way. Does this mean 2017 could see more confidence in the property market, and an increase in successful mortgage applications? The answers respectively are maybe and maybe. The director general of the Council of Mortgage Lenders, Paul Smee, has forecasted a rise in repossessions this year. Also, the home repossession statistics do not show to the reader if the drop in repossessions because of more people or is because fewer people actually own a home than in previous years.
It’s not to say that any of what I have just said is true, these are just the first questions that came to mind when I read the stats. I once read a sign boasting the UK’s rail’s 75% punctuality rate, and all I could think was that it was only highlighting that 1 in 4 of our trains are late. It’s all a matter of how things are chosen to word really. But as I said before, it is not highlighted as to how many homes are currently owned versus rented. A lot of people I know do not see themselves being anchored with a mortgage, and seem to be perfectly happy with the concept of renting and not feeling claustrophobic about a mortgage agreement. After all, the word mortgage literally translates to ‘dead pledge’! Not only this but aside from the limitations a mortgage can suggest, a lot of people simply cannot afford one either.
So for those not wishing to take out a mortgage what is left is renting, which is not without its own limitations. One can remortgage but one cannot re-rent. Eviction is the elephant in the room for many people who cannot keep up with rent. Plus, the property isn’t yours! Unless you take out a long term contract (may as well get a mortgage) then many landlords won’t even let you decorate your own place. And again unless you take out a long term contract, the property will always feel temporary in some sense, you have and end date in mind and therefore do not make the attachment to a rented property that you would to your own.
The ultimate truth is that there is no way to suggest which is better. Both rent and mortgages both have their downsides, but the only way to assess which would be better for an individual is on a case by case basis. Where I have said I know a lot of people petrified by the concept of a mortgage, I also know plenty of people thrilled by it. I do not want to deter you from a mortgage, and by the sounds of the BBC article, you seem to be better getting one now than any point in the last 24 years! Maybe it’s time to give the estate agent a call…
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