Norton Finance / Number of UK Homeowners Set to Fall

 

A recent report in the Guardian newspaper claimed that the UK mortgage market is ‘hardwired’ to undermine the population as a nation of homeowners. Despite a short-term boost to the housing market, research shows that by the end of the current decade only a third of young people will own and reside in their own homes. The 25-34 age bracket are the demographic who traditionally would be saving up for a deposit on their first home, yet the unavailability of mortgages coupled with increased rates and an unstable housing market has led to more and more people opting out of home ownership. The study, performed by the Intermediary Mortgage Lenders Association, or IMLA, says that this would place figures at just over half what they were back in 1993.

New government initiatives are beginning to ease funding constraints, but the availability of low deposit mortgages continues to be a problem. Chancellor George Osborne is set to add a couple of ‘sweeteners’ to the housing market in the form of the Bank of England’s funding for lending programme and his own help to buy scheme, yet economic studies suggest that these will certainly not work over the long-term, and perhaps not have much effect in the short term either. The future of the UK housing market remains uncertain, with more and more young couples and families being quite simply priced out of the game.

Norton LoansOlder homeowners are also affected by the fluctuating economy, with many considering taking out a re-mortgage or secured loan to pay for home improvements or holidays or to consolidate debt finding it difficult to source competitive rates. Companies such as Norton Finance offer a service which includes comparing rates of hundreds of re-mortgages on behalf of the customer in order to ensure that each individual is able to take advantage of the reasonably priced deals available. By utilising the services of Norton Loans, UK homeowners are able to release some or all of the equity in their homes to fund whatever they require whilst remaining assured that they are not paying over the odds.

Norton Loans guide to the pros and cons of secured and unsecured loans

If you have the option of choosing between unsecured and secured loans, it is important to weigh up the pros and cons of each before committing to one or the other. In this guide, Norton Loans discusses these two types of loans in more detail.

Secured loans require the borrower to put forward collateral, usually a house, before they borrow. This property then serves as a guarantee that the loan will be repaid, even if you do not have the cash to make your monthly repayments later down the line. With secured loans, Norton Finance says that lenders will usually be more generous in terms of the amount they are willing to borrow, as well the time period for repayments when they have this collateral. Loan providers offering secured lending will also tend to be more flexible in terms of who they lend to, because they have this guarantee of repayment. This means that even those with poor credit, defaults and CCJs may be offered a secured loan. Norton Finance

There are of course, disadvantages to this type of loan; firstly, Norton Loans points out, if you cannot make the repayments, then the lender has a legal right to take your home in lieu of this missing money. Secondly, overall, secured loans can tend to work out as more expensive than unsecured, due to the higher interest rates and longer repayment periods.

Unsecured loans do not require the borrower to use collateral; instead, the lender relies on the borrower making a legal promise to pay back the money. This means that it is highly unlikely that your property would be repossessed if you cannot make your repayments. Because these loans are not secured, the lender will normally offer the loan on risk based criteria, so that they can determine who they should lend to, as well as what interest rate they should offer. This means that those with poor credit histories are less likely to be approved for unsecured loans. However, for those who are approved, fixed interest rates are the norm for unsecured loans, which Norton Finance explains, makes budgeting for repayments much easier.