Buyers, first timers in particular, must welcome any downturn in house prices as a way to get a step on the property ladder, however modest the property. However, lenders are showing an understandably cautious approach to the amount of money they're willing to lend on individual properties, due to the performance of the housing market in the UK. There have always been fluctuations in the market and some periods are bumpier than others!



The thing to do is save, save, save. A healthy deposit is the way to avoid sleepless nights, and you need the maximum equity in your home, so that, should there be slight drop in house prices, it won't be a disaster. Historically, your home is the best investment you'll ever make. In 1972 a 3 bedroomed chalet style detached house, with garage and landscaped garden cost the princely sum of £6,150.00. Just think of today's value!

The way to work out your equity amount is to take the current value of your home, less any outstanding mortgages and secured loans. The amount remaining is your equity – in other words the amount which you would have in the bank after the sale of the property and the payment of debts on it.

Several mortgage lenders have decreased the amount of money which they'll lend to buyers, by cutting their maximum loan-to-value (commonly referred to as LTV). Whilst they seemed in recent years to be competing to lend 100% loans to would-be buyers, it seems that many will now only offer this to a borrower who has someone willing to guarantee payment of the loan should things go wrong.

Added to this, the more cautious building societies, which remained for a long time in the 90% loan range, are reducing this amount to 80%. This is totally understandable and many would say desirable and there are many that say if you can't raise a 20% deposit for a property, you won't be in a position to repay the debt.

Nothing is ever so clear cut as that, and individual circumstances need to be taken into account. Someone newly qualified in a highly paid professional capacity, for example, may have no hard cash accumulated, after years of studying, but be very capable of repaying a handsome amount in mortgage repayments.

Demand for houses is not likely to fall overall. More and more single people are expecting to be in the housing market as soon as they're able and this is what they've grown to expect in recent years. Bearing this in mind, any flattening of prices is likely to be relatively short lived, but lenders are showing a responsible attitude to mortgage debt, by applying the reins at this time.

First time buyers may welcome this change in the market with open arms, and it may be their opportunity to get into the property market. Our advice to them is to save as much as they possibly can and keep a careful eye on the property market in their area and price-range. Better to get into the market in an empty house with little more than a bed and a kettle than to stay out in the cold! There are such things as shared-ownership loans, where up to four friends can buy a property jointly; giving four people the chance to get the property ladder and start their home-owning careers.

For help with anything to do with mortgages, whether for a first-time buyer or for someone taking the opportunity to trade up to something bigger and better, the very best way to go is to find an on-line broker. Their independence will be your gain, and they'll search a very wide range of lenders to offer you the best deal, with the least fuss and form-filling.