It has been reported on a number of occasions recently on how first time buyers are finding it difficult to get their foot on the first rung of the housing ladder.

Due to high house prices, low income multiples and loan to value ratios from banks and building societies on mortgages and home loans, it has become almost impossible for many potential would be home owners to make the first step towards owning property.

But all that could be about to change as a number of the larger lenders in the UK have said that they intend to take action to offer additional help to first time buyers, through their range of mortgage and loan products. The main providers to support the initiative are the Halifax, Royal Bank of Scotland Intermediary Partners, Nationwide and HSBC.

It would appear that the Halifax are the most committed lender to first time buyers, by offering high loan to value ratios and initiatives such as a new deposit scheme in connection with the building firm Persimmon homes.

Paul Silcock from the Halifax said “Halifax continues to help more first time buyers than any other organisation. Our share of the first time buyer market has increased by 50 per cent in the last twelve months and we will still lend up to 95 per cent loan to value, assisting those with smaller deposits.”

Although the other lenders listed above have not been quite as active as the Halifax in the first time buyer sector of the housing market so far, all have said that they are currently looking into new methods of assisting people getting onto the housing market and intend to announce new plans and products specifically designed to help first time buyers within the next few months, whilst still remaining careful to maintain a responsible lending attitude towards new loans, in order that first time buyers are not over burdened with mortgage debt.

It has now been a year since the beginning of the credit crunch and between then and now we have been bombarded constantly with news about how property prices are falling across the UK and although these news articles often talk about variations between different regions of the country, there is little discussion regarding the variations between different property types.

But the latest figures, which have been released by the Government, show a huge variation in price reductions across different types of property.

According to the figures, the worst hit area of the property market has been flats and apartments, which have seen an average fall in value of 3.6 per cent in the space of one month from May to June this year.

To give some level of comparison, the average price of a semi-detached house in the UK fell by 0.9 per cent for the same period and a terraced house only fell by 0.3 per cent. The average price of a house for the month of June was £215,029, which is £1,596 lower than it was in May.

Over the past few years there has been a proliferation of new build city centre flats and apartments, many of which have been ridiculously overpriced, compared with the price of a house in the same area and many onlookers in the property and mortgage loan business have predicted larger than average falls in this sector of the market for some time. In fact many mortgage firms and secured loan companies have stopped offering loans on flats, due to the potential losses they face through negative equity.

So, for those of you who may be looking to buy a property in the near future, take the advice I give to all my clients, buy a house rather than a flat…it is a better long term investment. And finally, to all those clients of mine who didn’t follow my advice, well I don’t like to say I told you so………but!

The credit crunch is now affecting most of us in the UK, not just those of us with loans and mortgages, whether this is directly or indirectly.

This does not only apply to individuals who may be struggling financially, but also to a large number of companies who are seeing their costs increase dramatically and their order books shrink, as consumers tighten their belts and stop spending money on things which they don’t absolutely have to.

It is not only firms related to the housing market, such as estate agents, secured loan and mortgage companies and building firms, which are being affected, but a wide range of different companies, spread across a variety of industries, are finding business hard as the knock on effects of the crunch take hold.

Not surprisingly, companies who are struggling with their financial situation will be forced to cut back on their expenditure and the worries are that this will lead to increased redundancies.

In the most recent survey into the labour and employment market, which is conducted by KPMG and Chartered Institute every three months, a record number of employers said that employment prospects were extremely weak and 1,221 firms said that they were expecting to make redundancies over the next few months. In total, 27 per cent of those firms interviewed said that they would be forced to make redundancies during the course of the next quarter and only 29 per cent said that they had any plans to take on additional staff.

This news adds even more pressure to those individuals who may already be struggling with their finances and is only likely to add to the growing problem of arrears and defaults on personal loans and mortgages which are already being faced by lenders and borrowers alike.

The repercussions from the credit crunch are having a profound effect on many people living in the UK today, particularly for those individuals with loans, mortgages and other debts and many people’s personal situation and financial outlook for the future has changed significantly over the past twelve months.

As the cost of borrowing money via personal loans, credit cards and mortgages has risen sharply over the past few months, along with the rising cost of living with household bills such as food and fuel increasing well above an already high inflation figure, many families have found that they have been forced to make cut backs in other areas of their lives in order to keep up with their regular monthly financial commitments.

According to new research released last week by the secured loan company GE Money, forty per cent of families have had to alter their level of spending in order to cope with the financial implications of the credit crunch. Those worst affected are families living in major cities in the UK, with children under the age of four, where this figure rises to forty six per cent.

In fact, of the 3,145 people who were interviewed for the survey, almost one in three said that they felt as though they were no longer in control of their finances and the same percentage claimed that they had no spare cash left over from their take home pay, for luxuries or savings once they got to the end of the month. More alarming perhaps is the fact that eleven per cent of people admitted that despite cutting back on their outgoings, they were still spending more than they earned on a regular basis.

A spokesperson for GE money said “As the general cost of living increases, it is important that parents, and especially those looking to start a family, have access to independent free advice on money, to help look after the family finances.”

It is now almost one year since the start of the credit crunch in the UK and many individuals are wondering how long the current situation is likely to continue, can we see the light at the end of the tunnel, or is it just the headlights of a train speeding towards us?

There certainly appears to be a little more optimism recently than there has been over the past few months. It was reported yesterday that the falling rate of house prices in London had slowed down significantly in the month of July, which is a good indication of what is likely to happen in the rest of the country over the next few months.

Banks and Building Societies are also beginning to relax their lending criteria slightly on loans and mortgages and at the same time many lenders are starting to reduce interest rates on new loans, which is good news for borrowers, although lending criteria remains much stricter than it was twelve months ago.

The biggest change is the reduced loan to value ratio’s being offered by lenders. The 100% plus deals which were available have now completely disappeared and although there are one or two lenders offering loans and mortgages of up to 95% loan to value, it is more likely that someone thinking of buying a house will have to find a much larger deposit. This is particularly bad news for first time buyers, many of whom struggle to raise even a five per cent deposit.

Increases in the cost of living, coupled with a continuing slowdown in the economy, have caused many consumers to cut back on non essential luxuries such as holidays, or a new car, for example and personal savings levels have also dropped to an all time low.

We have witnessed a correction in the housing market, following a long period of excessive growth in property prices, which has placed the average house beyond the grasp of many potential buyers and we are now paying the price for this.

It seems likely that house prices will continue to fall , although the rate of this decrease will probably slow down as time goes on and it will probably be as long as 2010 before we start to see property prices increasing once more and some level of stability returning to the markets. So, although it may be some time away, there is a glimmer of light at the end of the proverbial tunnel.