Despite the recent dip in the property market, first-time buyers are undeterred by 100% Mortgages and are still looking to get a good deal.  Although reports suggest that overall there have been fewer mortgages enquiries since the first quarter of 2007, first-time buyers are very much fully prepared to opt for 100% Mortgages.

Figures for September and October have fallen, but more than 78 per cent of the enquiries made during this time, were by first-time buyers wanting 100% Mortgages.  This is an increase of over 40 per cent compared to the first quarter of the year, when just 57 per cent of 100% Mortgage enquiries were from first-time buyers.

It is thought that the demand for 100% Mortgages is because people, especially first-time buyers, want to own their own home and get out of the money pit, which is renting.  This is then only encouraged by lenders like Alliance and Leicester, who are willing to offer up to 125% Mortgages, to ‘help’ people to get on the property ladder.

Interest rates have risen 5 times since August 2006 in an attempt to keep inflation down.  This has resulted in a slump in the market and first-time buyers being stretched to their limits.  With this in mind, some mortgage advisors are suggesting that even a 5% deposit could provide some stability in today’s rocky property market.

Banks in Britain will this week come under fire to reveal the extent of their losses following the worldwide crack down on Bad Credit Mortgages and it is estimated that the US annex of HSBC will have to write off a further $1bn.

HSBC, who are already under attack from an ‘activist investor’, are expected to re-evaluate it’s mortgage portfolio, in particular their Bad Credit Mortgages.  This could also spark the pressure on Stephen Green to step down as chairman.

Barclays is also under increasing strain following the suspension in its share trading on Friday, after the bank’s value fell by 9%, and the several reports that claim Barclay’s are harboring huge undisclosed amounts in debt due to the capitalisation in Bad Credit Mortgages.  Despite Barclay’s flat denial of problems, they are set to meet with auditors PricewaterhouseCoopers, adding fuel to the fire surrounding their amounting debts.  It is feared that the losses to the bank due to their borrowing for Bad Credit Mortgages could be as much as 100 times the originally estimated figure of £70m. 

Speculation surround the actual amount in debt has seen a dip in Barclay’s value by a massive 35% and the Royal Bank of Scotland’s value drop by 39%.  RBS have blamed the loss on the lack of willingness by boss Fred Goodwin to speak out on the debt caused by Bed Credit Mortgages. 

Shareholders are currently being kelpt at bay, by prompt admission of losses by banks, but surely there is only a certain amount of time before the fall out begins.

As the number of people with Bad Credit Mortgages who are failing to make payments rises, the predicted losses for Wall Street looks like reaching half a trillion dollars.

The devastation of such losses could cause banks to re-evaluate and tighten their credit lending on Bad Credit Mortgages, which would then have a negative impact on economic growth for years to come.

Bad Credit Mortgages in the US have lead to many repossessions, which is predicted to result in halving the US growth rate in as little as six months.

The reason that this has happened, is that in order for banks to keep up with the growing number of Bad Credit Mortgages, banks have had to borrow money from credit markets. Already Wall Street banks have recorded losses that total $50bn (£24bn) and the head of the biggest bank, Citigroup, and the head of the biggest investment firm, have stepped down.

Potential Bank Liabilities:
Citibank: $90bn
JP Morgan Chase: $78bn
Bank of America: $58bn
ABN Amro: $44bn
HSBC: $34bn
ING: $32bn
Fortis: $28bn
State Street: $28bn
Wachovia: $26bn

It is also foreseen that many banks have underestimated their potential liability and are looking at sometimes 4 times more than they have actually declared.

The issues caused by Bad Credit Mortgages affecting the US market are likely to spread and it is only a matter of time before we are experiencing the back lash.

The Government are about the unviel their plans to help first-time buyers avoid 100% mortgages and get their foot on the property ladder.According to a report published today, thousands of first-time buyers are at risk from negative equity following the huge rise in the number of 100% mortgages available, so the Government is considering introducing more shared ownership mortgages run through housing associations.Although, 100% mortgages allow first-time buyers to get on the housing ladder, without laying down a deposit, it does however mean that they are borrowing the full value of their property and in some cases more than the property is worth, leaving them with negative equity. From January 2006 and August 2007, over 33,000 took out 100% mortgages, but they could now be paying the price with house prices set to drop and house repossessions bound to rise.Shared ownership allows first-time buyers to purchase a percentage of their property whilst paying rent on the rest, therefore avoiding taking out such a high mortgage. There will be a range of properties available including new build and re-sale properties, but you will have to meet eligibility requirements relating to your credit rating and income.

With predicted figures for property prices looking to increase by at least 5% next year, the buy-to-let market is set to go crazy with more people than ever wanting to rent.

The buy-to-let market rose by 10% this year alone according to the Royal Institute of Chartered Surveyors and the rise is set to continue. Demand is strong and investors are able to secure some excellent deals, making this the age of the buy-to-let.

The rise in 100% mortgage borrowing has lead to buy-to-let properties accounting for 11 per cent of the total mortgage market in 2006.

The housing market has come a long way since the Council of Mortgage Lenders recorded its first ever figures in 1999. There are several factors that have lead to the market boom that we are now experiencing, but none so powerful than possibilities that people see within the housing market for investment return and the thousands of people looking to rent from them.

Back in 1999 there were just 73,200 mortgages worth £5.4 billion and now figures are around the £100 billion mark and there are 849,900 buy-to-let mortgages.

It is clear that consumers see property and buy-to-lets in particular as an obvious place to invest money for retirement or as an actual income and the demand for properties to rent will continue to grow. With growth in student property to accommodate the number of university goers, affordability issues for first-time buyers, the break-up of the family unit and mass immigration there has been a huge change in attitudes towards renting and will see the buy-to-let market’s biggest figures in 2008.