Barriers to buying ñ and how to get over them

According to research from the Halifax, more of us expect house prices to rise than fall over the next 12 months, yet 80 per cent of us predict our personal financial prospects will either worsen or show no improvement over the same period.

The same survey shows that, while half of us think that the next three months would be a good time to buy a property, fewer than a third ñ just 14 per cent ñ believe it would be a good time to sell.

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Itís not hard to see that this ambiguity over the housing market is linked to economic uncertainty. But other factors are creating barriers to buying ñ and many of them may not be as daunting as they seem.

These are some of the most common concerns cited by would-be buyers ñ and some ideas for tackling them.

ìMy finances are in a mess.î
Nearly a third ñ 31 per cent ñ of people in the Halifax survey said their household finances prevented them from buying a new home. If you fall into this category, donít despair ñ there is plenty you can do to ease your cashflow. Start with an audit of your income and outgoings, remembering to include all your household bills, bank and credit card statements ñ then look for ways to cut back. You can keep a check on your cards and loans by looking at your credit report. This lists your credit accounts and repayment record, so it will show how well youíre managing. Itís free to see your Experian credit report with a 30-day trial of CreditExpert.

ï Look for regular expenses that you can easily cut, such as magazine subs and the coffee you buy on the way to work
ï If your credit report contains any mistakes, ask the relevant lender to rectify them ñ even a minor error can affect your credit rating and might mean you pay higher interest
ï Close any accounts you no longer use, to avoid the temptation of using them

ìIím struggling to save a deposit.î
Around half the respondents in the Halifax survey said that raising a large enough deposit was preventing them from buying a home. But, the best deals still go to those with the most capital, 10 per cent deposits are becoming more common. As ever, though, your finances will need to be in top shape to get one.

ï Use price comparison sites, voucher codes and special offers to make your money go further ñ and set the saving aside
ï Try to cut interest payments by reducing your debts, targeting the most expensive first ñ you may benefit from rolling several into a lower-interest loan
ï Consider moving back in with your parents while you save ñ or, if that doesnít appeal, try going out one less night a week

ìBut there arenít any mortgages.î
This was the view of more than a quarter ñ 27 per cent ñ of people in the study. The truth is that affordable mortgages are out there but you need to have an impeccable credit history to convince lenders that youíre worth it.

ï Make payments on time, every time ñ missing or delayed repayments stay on your credit report for at least three years, making lenders think youíre unreliable ï Add a note of explanation to your credit report if special circumstances, such as an illness or accident, account for past problems
ï Register to vote at your current address ñ lenders use the electoral roll to check that you live where you say you do, so it can improve your credit score

ìItís just not a good time to buy now.î
Many respondents blamed the state of the economy for preventing them dipping a toe in the property market, with 52 per cent saying they were worried about job security and 22 per cent expressing concern about rising interest rates. However, official figures show that unemployment fell by 416,000 in the year to March 2011, while experts from the International Monetary Fund generally agree that the economy is undergoing repair.

ï Do some research ñ you may find the property market more tempting than you think.
ï Start getting your finances in shape by checking your credit report ñ even if you decide not to buy, youíll be in a better position when you need a new card or loan. You can see your Experian credit report for free with a 30-day trial of CreditExpert.

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