As a result of the US subprime crisis and the ensuing credit crunch, the housing market throughout the UK has begun to go into free-fall, with property prices down approximately 10.9 percent in August in comparison to the same stage last year. The aim for the Treasury is to help first-time buyers into the market, who are already restricted by the slowdown of mortgage acceptances and the demand for large deposits.



News of the rise in threshold of stamp duty will therefore come as a welcome relief to potential homeowners up and down the country. However, first-time buyers remain hindered by a number of factors when attempting to raise finances to purchase their first home:

1. Rental costs. The costs of renting a property has risen in accordance with the downturn of the housing market. As owners are faced with sharp increases in interest rates thanks to the expiration of introductory offers on buy-to-let properties, tenants are often footing the bill for the increase in mortgages. Subsequently, the ability to save for a deposit is hindered.

2. Disproportionate wages. National surveys are often telling us how the average UK wage is in excess of GBP23,000. However, the accuracy of this figure is far from correct with the calculations distorted by those with significant wages packets offsetting those with more limited income. House prices have escalating rapidly over the past decade, continually moving away from the affordability of those on smaller incomes.

3. Existing debt. Student loans, utility bills, cars, credit cards bills and countless other 'luxuries' have led many to accrue significant debts that need repayment. Coupled with wages that provide less expendable money, little if any savings can be put aside for a deposit.

4. Deposits and mortgages. The advent of the credit crunch has seen many mortgage lenders dramatically rethink their lending policies. No longer are first-time buyers being offered 125 percent mortgages or even 100 percent mortgages. Accordingly there is a requirement for buyers to put down a significant deposit - usually ranging from 10-25 percent - before mortgage companies will lend the remainder of the house value.

5. Solicitors fees. The process of purchasing a property is one of the most stressful periods of anybody's life with pages of legal documents to wade. Accordingly, solicitors are in place to handle the pages and pages of paperwork involved over the course of the purchase. This is, however, another expense that can amount into the thousands, eating away at the buyer's deposit and affecting the amount required as a mortgage.

These points detailed above are, of course, just a number of factors that affect first-time buyers as they look to enter the property market, and individuals everywhere can probably add many more. So although the raising of the stamp duty threshold will come as a relief to many, the battle to get on the property ladder remains fraught with difficulty and financial hardship.