Barriers to Home Ownership - What's Stopping You?

If you're working in the UK property market at the moment, especially with first-time buyers and anyone with a low deposit or credit problems, its really hard going. Potential buyers are facing more hurdles then ever before, and the dream of home ownership is moving further away for many.

Every day I seem to hear that it's getting increasingly difficult to get onto the property ladder, even if you've got some money behind you. The reasons range from the knock-on effects of the credit crunch to just a simple lack of suitable homes to buy in the right price range.

Here are a few of the most common barriers to owning a home - but why not let us know what's holding YOU back, by taking part in the poll on my web site after you've read through this article:

• Bank Lending Criteria

Even though bankers are still earning mega bonuses, they're nowhere near as understanding when it comes to lending out their money to home buyers. Self certification of earnings is a thing of the past, and if you're self employed try getting a loan without three years of audited accounts!

Even if you're in salaried employment you can expect to have your credentials examined in a lot more detail than before the credit crunch - and find that loan to earnings multiples have also been lowered.

A very small number of lenders still operate a fast track application process, but any credit rating blemishes immediately bring this to an abrupt halt!

• Size of Deposit Needed

You've probably noticed that all the mainstream mortgage lenders are asking for bigger deposits, and there are very few loans at +90% of the property value. Where higher percentage lending is available you'll also find that penalising new borrowers with higher interest rates is common. Many potential buyers have worked hard to scrape together a deposit that they thought would be sufficient... only to find that the goalposts have moved, sometimes literally overnight.

• Lack of Affordable Property

The build programmes of the big property companies have slowed to a trickle in most parts of the UK. Not unexpected really, as home valuations have fallen dramatically to squeeze their profit margins and shareholder returns. The big builders are just sitting on their land banks for now, waiting for prices to recover before they embark on new developments - not much use if you want to buy right now!

New build homes, with the sales incentives they attract, are one of the most common entry points for first time buyers, and an overall driver of the UK property market. The overall supply of available (and affordable) properties is further diminished by existing home owners waiting out the recession before looking to move.

• Monthly Payments Too High

Many potential home owners are experiencing income problems - with overtime cuts, lost bonus payments and even redundancy impacting on the household budget. Add to this the increases in petrol, food and energy bills, and the level of cost commitment needed to buy a new home quickly becomes prohibitive.

• Credit History Problems

It has always paid to be aware of any credit related issues, and the long term damage that can happen if payments are missed. Banks have become hyper sensitive to the credit ratings of new borrowers, and will now frequently shy away from any perceived risk. Here are a couple of related articles that will help manage and overcome any skeletons in the closet.

Now take part in our Poll "Home Ownership - What's Stopping You", with the link from my home page. After you cast your vote you'll be able to see the results so far.