The government have introduced certain schemes to support some markets through this recession, noticeably the banks.  They have also spent billions on supporting the car manufacturing industry due to the labour market that it supports, from direct labour through to suppliers.

So why haven’t the government supported the building industry?  This one industry sector supports more labour markets than any other.  Do you know it takes over 20 different trades to build a house, from the architect who first designs it through to the decorator at the end and the other industries it supports are huge.  The property market has been left out on its own, lenders are no longer supportive of the house builder and many refuse to lend on certain types of new build houses.

The Government have introduced some schemes to help buyers onto the property ladder through shared equity schemes, however these have not gone far enough and have largely failed to do the job they where supposed to do and we now see many tradesmen and women laid off due to the lack of activity.

The current situation was started by the property and mortgage market and I firmly believe that this is where we need to concentrate our efforts to end this terrible recession.

The reason that property investment became so popular was that ordinary hard working people where frightened off conventional investments.  Investors where tired of giving hard earned income to some fund manager in hope that they could net sufficient returns in time for their retirement.  The stock market is very volatile and any investment is always considered to have risk to the capital invested and we have also had a few pension scandals along the way.

On the other hand property was always considered to be safe; the tangible asset would always be there and over the past 10 years property values have only gone one way “up”

 Even through this past 2 years property has still been seen to be a good investment, people are still very keen to buy property, I have yet to meet one person that says they will never invest in property again.  I predict that the property market will recover within the next two years.

 So, is property still a good investment?  Well let’s compare the two.

 I have an existing endowment that was taken out when I bought my first house back in 1988.  The target amount was £36,000 and the premium is £67.40, the current value is £22,147 and the projected final amount will be £27,240; this is an £8,760 shortfall.  The property that I bought at that time now has a value of around £105,000:  So you tell me “is property still a good investment” If it is done properly and you get the right advice, absolutely.  Property investment is like any other investment, it needs your time to look after it.

With lenders tightening their lending criteria on a daily basis and making it harder for borrowers to obtain mortgage funds, I am often asked “what can I do to make myself more appealing to a lender” Well here are some obvious tips.

Lenders are looking for larger deposits and loan to values are being squeezed, it is impossible to get mortgages over 90% loan to value, so the first thing you need is a good size deposit, the bigger the deposit the better the mortgage deals.

The key area for any lender at the moment is the credit search.  Lenders are looking for a squeaky clean credit file so please ensure that all existing credit commitments are up to date and have never had any missed or late payment.  Lenders are not looking for excuses or reasons for missed payments as in their eyes “everyone has a story”  if you are having a dispute with a loan company or service provider DO NOT cancel payments as part of your dispute as this will affect your credit file.

As part of the credit search process there is a credit score, this is a system to ensure you come up to the lenders expectations, always remember that it is a computer that decides whether you get a mortgage or not, not a human.  The credit scoring system takes into account a lot of things but it will look at your credit history, your employment, your existing commitments and income.  To gain maximum points on the credit score you need the following.

Be on the voters roll,  ensure  credit commitments are up to date, being at the same address for over 3 years also helps.

First Time Buyers can have problems with credit scoring through no fault of their own, to help First Time Buyers approve their chances there is one thing I would recommend “ get a credit card”, just a small one with a small credit limit, use this card to buy the odd item or pay for petrol and ensure you it pay off ever month, this will show a potential lender that you are responsible.