The recent stabilisation of house prices coupled with the increasingly stringent lending standards may give the impression that first time homebuyers with little or no savings have no option but to forego their plans of buying property. Indeed, data provided by Nationwide showed that the average first time buyer in the UK has to use 49% of their post tax salary towards mortgage payments - the highest level since 1990. But according to a recent survey, the current climate in the UK does not deter many property investors from acquiring their first property even if it meant purchasing them somewhere else. A significant number of people are making their first property purchase abroad.
According to many property experts, the rising cost of mortgages and excessively expensive property prices have compelled some first time buyers to purchase their first investment property abroad.
Fifty percent of these first time buyers say they would buy overseas so they could get on the property ladder. In addition to this, the survey also found that the number of first-time buyers who are thinking of investing in property abroad has increased twofold in merely 10 months. France in particular provides a secure investment for first time buyers because of the strength of its property market. Experts agree that the outlook for the French property investment remains optimistic giving investors a better chance of earning solid returns on their investments.
The survey also reveals that countries at their peak are seeing property values rising by up to 30% per annum. This allows property investors to start taking in a weekly or monthly profit almost immediately from the rental of their property abroad which they can use to put back into a deposit for a property in the UK.
For property investors who have decided to get on the property ladder, experts provide the following essential advice to help make their climb a much easier task:
* Save up for that important deposit. The end of the 100% mortgage spelled trouble for many homebuyers as they are now obliged to put aside a significant deposit. Industry experts suggest drawing up a budget for expenditures, opening a savings account and depositing a fixed amount each month.
* Opt for shared equity. This type of scheme allows homebuyers to buy a property at a discounted price (for example 90% of the purchase price) with someone else such as a property developer holding the second mortgage on the property for the other 10%. When the property is eventually sold, they would get 10% of the property's new value.
* Buy property using shared ownership. Getting on the property ladder is also possible through a shared ownership basis. For instance, homebuyers could own 75% while someone else, usually a Housing Association, owns the rest. Mortgage payments can be paid on the 75% and rent on the other 25%. This setup also offers buyers the option of buying more at set times.
As with any other investment, it's best to seek the help of qualified professionals who can provide homebuyers with the best advice and at the same time protect their interests and make the purchase a stress-free experience.
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Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide -
http://www.Property-System.com
