As house prices have risen and stabilised over the past couple of years it has been very hard for first time buyers to actually 'buy' their first property. This has forced most young first time buyers to rent houses as they simply cannot afford property for sale in their affordability range. This maybe because of student debts after coming out of university or just house prices in their area are simply too steep.



But in the past year house prices have slowly steadied and towards the last quarter they have gone down 1.87%. But this does not help the situation for first time buyers because they could not afford to take out a mortgage due to the credit crunch taking effect over Britain at this point in time. The effect on the UK is very large and many figures have been thrown around saying that economic growth in the UK will go down by 1% in 2008 and 2009 compared to recent years.

Overall this means that many young people bidding to buy their first property won't be able to take out a mortgage or a loan. This is because their will be only limited availability to take out loans from banks for property and the interest rates may be higher. As I am looking to maybe own my first property in the next few years I am very concerned over this plummet. In my opinion I think it may be best to rent your first property rather than buy a property outright as in the long run it will save you money unless the credit crunch somehow starts to stable and house prices go down around the UK.

I think it may be best to rent as costs have not been too affected by all this and rent prices are still in many peoples price ranges. My opinion of all this is that under all circumstances avoid buying first time, as you will not be able to afford all the expenses and your banks may turn you down for a loan or mortgage.

In addition the current portfolio of property for sale in any area is likely to devalue once a purchase is complete, this give a very real danger of negative equity over the early part of a mortgage.

To help simplify the housing market and your price range you could ask some lenders or banks how much they would let you borrow based on your credit history and your salary. This will help secure a property price range that you could afford. If your banks or lenders do turn you down, or the price range you have is not enough to get onto the property ladder, all is not lost.

You can privately rent properties which are still a very cheap option and as long as you keep on top of rent rates then you are in clear skies. This allows you to have experience of having a property and there is no mortgage to worry about. This means when it comes to buying a property you will be better prepared and renting a property may allow you to save some money to put forward when buying your first house outright.

In conclusion, the credit crunch does not look like releasing its grip on the housing and credit market meaning if I was a first time buyer I would really consider renting my first property and then saving a bit of money to contribute to my first house. This guarantees a much safer future rather than getting turned down for a mortgage or a loan for my first property and with house prices steadying and falling it wont be too long before first time buyers can look forward to having an easier future getting on that first step of the property ladder and owning their first house.