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Property availability has hit a four-year low

Property availability has hit a four-year low

Category: Mortgages

Updated: 13/11/2015
First Published: 13/11/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The lack of affordable homes coming onto the market has not only meant that it's harder for many to get onto the ladder, but it's also led to property availability hitting a four-year low, with figures showing that the overall housing stock is at its lowest since 2011 – which is why it's so important to get your finances in check.

The figures, from Experian, show that around 250,000 new properties went on sale between July and September this year, some 3% lower than the same period in 2014. Not only that, but the Property Index went on to reveal that this had been driven by a drop in the number of "affordable" homes for sale: the number of properties priced at £100,000 or less fell by 5% over the same period, while property availability in the £100,001 to £250,000 band dropped by 10%.

At the other end of the scale, the number of high-end properties available – those valued at more than £500,000 – has been steadily rising, with the number of homes on the market in the £500,000-£750,000 price bracket having increased by 10% year-on-year, while houses valued at £750,000+ increased by 6%.

However, this certainly won't come as any consolation to buyers locked out of that sector of the market, with first and second-time buyers, particularly those with growing families, likely to be most affected by the shortage of affordable homes, said Andy Wills of Experian CreditExpert.

"With this in mind, it's vital people get into the best possible financial shape to demonstrate they are eligible for a mortgage, starting with a strong credit rating," he added. "Prospective buyers should take time to build a positive credit history and record of money management, so it's important to start preparing as soon as you decide to buy."

As fewer affordable properties come up for sale it can be difficult for prospective buyers to navigate the mortgage market, but Experian CreditExpert has devised these tips to help people get into a good financial position and secure the best property they can afford:

  • Know what you have to spend. When you're looking for that all-important first or second home, it's important to consider what you can actually afford. The level of deposit you can build will be a key factor, as will the mortgage size you're likely to be approved for, and from there you can start your mortgage search to see what you could come up against in terms of interest rates and fees.
  • Do your research. Using a mortgage calculator will be a great place to start, but you'll probably want to follow that by speaking to a mortgage adviser to have a more thorough understanding of the deals that could be right for you. Furthermore, having an understanding of the market in your chosen area will help you find a home of the style and price you can afford, and it could help you move quicker, too.
  • Scrutinise your spending. Carefully scrutinising your last few months' outgoings will help you understand exactly where your money is going, and can help you identify any areas you can cut back on to improve your financial position and – ideally – boost your deposit fund. Remember that stricter affordability rules following the Mortgage Market Review will mean lenders are likely to look back through your accounts, and will be more likely to approve those with a solid track record who know how to budget. Prepare for that by building good habits like increasing the amount you save, clearing overdrafts and cutting back on discretionary spending to ensure you finish the month with at least a small surplus.
  • Check your credit report. As soon as you make the decision to buy your first home, check your credit report – Experian's service offers a great way to do this. Ensure that everything is accurate, up-to-date and reflects your current circumstances, and if you spot any errors, contact the relevant credit reference agency and ask them to investigate.
  • Room for improvement. After you've checked for inaccuracies, you'll want to see if there's anything you can do to improve your score. If you spot any areas for improvement in your report, make a plan to get it into shape well before making your mortgage application. There are a number of steps you can take, including ensuring that you're registered on the Electoral Roll, paying down outstanding credit card balances, paying off more than the minimum repayments each month, and making sure never to miss a repayment.
  • Don't fall at the last hurdle. Once you've found a property and are ready to apply for a mortgage, take time to do some last-minute checks. Check your credit report again to make sure nothing has changed and everything is accurate before you apply, paying particular attention to your address and other personal details. Small inaccuracies could see your application turned down, so don't overlook the details.

What next?

Ready to take the plunge? Then compare mortgages to find one that meets your needs, no matter how pricey a home you can afford.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.