Image via Flickr

Since the financial crash back in 2008, it’s been a very difficult and frustrating time for first-time buyers to get a foot-hold on the property ladder.  In a strange twist of fate, it was the gung-ho attitude of mortgage lenders pre-2008 that ultimatly led to the financial crash and the difficulties that first-time buyers’s face today while trying to get on to the property ladder.

The main reasons for this difficulty are, that there are 98% less mortgage products available today as compared to pre-2008, the criteria for approving applications are much more strict and the average deposit is now an eye-watering 30% – which is over £35,000 for your average first time buyer.

Many  rightly feel more than a little aggrieved, as raising this kind of money is very, very difficult and is not always a good measure of whether someone can responsibly afford a mortgage or not.

These days around 18% of 18 to 34 year olds are asking for help from the bank of mummy and daddy.  Not everyone has access to a bank of mummy and daddy and for them there are really only two options; take out an unsecured loan or just save.

Around 16% of first-time buyers are considering taking out an unsecured loan to pay for their deposit, but this is a worrying trend.  If your mortgage provider found out you were planning to pay your deposit with an unsecured loan, your application would be declined, as this would be considered a 100% loan.  Interest rates on unsecured loan tend to be quite high, so it really doesn’t make financial sense to fund your house purchase in this way.

Really the only sensible way to get onto the property ladder is to bide your time and save up for a deposit.

A deposit is only one of a myriad of costs faced by any house buyer. There are many other cost’s to be considered too, like stamp duty, solicitors fees, removal vans, utility bills, furniture, renovation and decorating costs.  You really should try and make a detailed analysis of how much money you have coming in and how much you can realistically afford, including a budgeted buffer to pay for unseen costs like emergency roof repairs etc.

Don’t let your heart rule your head.  Research a property properly and make decisions based on solid financial information.  Buying a house you love, but can’t sustainably afford is a recipe for disaster.

There are a few other schemes that can help you get on the property ladder; check out the governments Firstbuy scheme or shared ownership scheme, both of which will help you get on the property ladder without having to save up a huge deposit.

Fundamentally there is no easy way onto the property ladder.  The best advice is to wait, save up a deposit and look carefully for the right house.

Have you recently bought a house, or are you still looking for one? We’d love to here about your experiences in the comments below.

Image via ell brown

Lloyds Banking Group has announced a £3.3bn pre-tax loss in the six months leading up to June 30. The bank took a £3.2bn hit after compensating customers following mis-selling of payment protection insurance (PPI) to customers.

Lloyds, which is 41% state owned, was widely expected to make losses following an announcement in May that it was putting the money aside to cover issues arising from the PPI scandal.

The banking giant’s compensation bill is significantly higher than any other British bank with Barclays setting aside £1bn, RBS £850m and HSBC £269m.

Even without the one-off expense Lloyds profits were down compared to last year when they reported a £1.3bn profit.

The losses are partly blamed upon the Irish financial crisis with nearly two thirds of loans to the Irish economy reported as impaired. Losses on bad loans at Lloyds’ Irish operations hit £1.8bn over the period which is 14 percent worse than a year ago. The losses take into account the expected fall in property prices. The high street bank has lost £9bn on its Irish loans since the end of 2008.

The financial crisis has hit Lloyds particularly hard following its government-supported takeover of the HBOS group in early 2009 where they took on billions in toxic debt. While the UK government looked over monopoly concerns at the time in order to save the banks, Lloyds is currently looking to sell off more than 600 branches following concerns from EU regulators. While they hope these will be sold by the end of the year, no credible frontrunner has yet emerged as a buyer.

Lloyds banking group appointed Portuguese businessman António Horta-Osório as CEO in March this year and he has introduced a number of measures in order to bring the bank back into private ownership. This includes cutting 15,000  jobs and winding down a number of international operations.

Lloyds shares were bought at 63 pence per share by the British government in early 2009. Recently they fell to a two-year low of 35.755 pence.

Do you think Lloyds are moving in the right direction? Were you affected by PPI mis-selling? Tell us what your thoughts in the comments section.

Well the second point is the most important one, as it seems very few people have actually followed through on Cantona’s suggested actions. The 7th of December was supposed to be D-Day for the banks, with people trying to destroy their power, but it didn’t really go down that way.

Now thousands of people seemed to be on Cantona’s side…if you checked Facebook, but I mean come on, how many of you have signed up for something on Facebook but not actually done what the group asks of you? I said I was going to buy Killing In The Name Of, but I didn’t. I probably won’t buy Bird Is The Word either, but my Facebook says different.

French protest group StopBanque also said that they had 16,000 people who were going to remove their money, but apparently only a small group of people in costumes (just so we take them seriously) turned up in Paris to withdraw their money and then pay it into another bank. So what was the point really? (You can see them looking stupidly smug in the picture below).

Cantona also said that he would withdraw his own funds, but it is unclear if he actually went ahead with it. Surely that is just inviting people to mug him as he leaves the bank.

Image via Sky News

This announcement comes after 350 years of cheque usage, however because of the use of credit, debit and contactless payment cards, alongside online shopping and banking, it seems that in recent years the cheque has fallen into a ‘terminal decline’.

The council stated that as long as the needs of the vulnerable and elderly are met, then, “The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque.”

With an execution date decided for the cheque, and a rise in the use other forms of payment, it looks as though cash may be next to face the block. While the advent of a cashless society has been widely heralded for around 40 years it has not seemed possible until recently.  However through the successful widespread use of mobile phone sims for small contactless purchases in countries like South Korea, it may just be that cash may also finally be coming to an end.