The 10% inflation may have affected the whole of the UK, but with London being the most expensive place to live in the country, houses there have become even further out of reach for cash strapped first time investors, who are expected to find a deposit of at least 25%. Finding that size of deposit for a house in Colchester would be much easier, and the costs involved with commuting would be outweighed by lower loan repayments.

However, getting a lower mortgage quote in Colchester does not guarantee a mortgage approval. This April, approvals were down by 9% on last year’s figures, and the number of first time buyer mortgages that were approved made up for only 35% of the total, which is the lowest proportion since the autumn of 2007. There are however a number of first time buyer incentives in Colchester that will allow investors to secure a mortgage with a small deposit, as little as 5% in some cases, with the help of housing developers.

Bovis and Taylor Wimpey are two developers who still have unsold apartments in Colchester, ideal for families and commuters. These developers are offering special mortgage deals with low deposits in conjunction with mainstream lenders to help first time investors take their first steps on the property ladder. These newly built homes give access to some of the most competitive mortgage quotes in Colchester, and are well suited for buyers having trouble raising a large deposit.

The restructuring of the mortgage market has raised fears that high LTV loan approvals will be even more difficult to come by, but industry experts are hoping that the changes will mean more competitively priced high LTV loans based on new lending regulations. This is good news for potential first time buyers who are currently trapped in the rentals market because they cannot raise sufficient deposit whilst paying the high rental rate.

If the lending criteria is changed to accept borrowers who can demonstrate their ability to make monthly repayments, i.e. through evidence of paying rent every month even though they are unable to access a significant deposit for a mortgage, then the property market might finally be able to open up for first time buyers. The mood is however cautious over high LTV approvals as banks avoid high risk loans, an issue that will be addressed by the Bank of England as it takes over responsibility from the FSA.

Rather than restricting mortgages for borrowers, the aim is to help keep lenders on the right path through reformed lending rules. This has the potential to allow loans to be approved according to criteria that are not arbitrary, which should bring an end to those with enough money but no deposit being refused a mortgage. Sensibility dictates that if a resident can afford to make and keep up payments on a rented property, they can do the same for a mortgage, the Bank of England just needs to provide a way out of the rental trap.

For the Quadriga development in Colchester, mortgages are available for a maximum 90% LTV which means that borrowers will have less of a struggle saving for the deposit. There is a two-year fixed rate option and tracker mortgages available which have interest rates of 4.99% and 2.99% respectively, and both have an arrangement fee of £999. To apply for one of these products, borrowers should approach the Woolwich, Barclays’ chosen brand for mortgage lending.

First time buyers are being encouraged to apply now as the Bank of England have kept the base rate at 0.5% for the 15th consecutive month. There is speculation that interest rates will rise to over 3% by the close of 2011, and therefore for maximum benefit, borrowers should take advantage of the offer while rates are low, especially if they are considering a tracker option for an Essex home.

The lifetime tracker option is gives the borrower an opportunity to pay just 2.49% above the base rate, which means, if economic forecasts are correct, interest rates on a mortgage with Bovis and Barclays will remain at 2.99% until early 2011. These mortgages are another example of exclusive deals that can be found in the mortgage market, often unadvertised by mainstream lenders.

It seems that in Colchester, mortgage advice such as this has primarily fallen on deaf ears up until now. It has dawned on homeowners that whilst the UK has been enjoying the lowest mortgage rates for years they could have been keeping up the original monthly repayments to reduce their debt rather than using the ‘surplus’ cash for other purposes. It is not surprising that when interest rates fell that borrowers who found themselves with an extra hundred pounds or more a month decided to use it for something other than paying a mortgage.

However, with tougher times on the horizon, overpayments made now will still make a dent in the debt and it will also brace borrowers for the inevitable – mandatory higher repayments. Mortgage advisors in Colchester are highlighting the benefits of overpayments in terms of saving money, but also as a safety net. Many people find it difficult to adjust their spending when outgoings go up, and if interest rates rise significantly, there is a serious risk that some borrowers may fall into arrears with their mortgage payments. By following the advice being offered by mortgage professionals, Colchester homeowners may not be able to afford as many of life’s little luxuries, but they will be prepared for what at the moment looks like a somewhat uncertain future.

Dovercourt on the Essex coast near the town of Colchester has a range of newly built family homes starting from as little as £138,546. The area has proved popular with Londoners who have decided to move somewhere that has a more relaxed pace of life. The peaceful and picturesque Dovercourt development from Taylor-Wimpey is only available at such an incredible price because of an equity scheme being promoted by the developers, which means that not only does the buyer only have to find 5% deposit, the overall purchase price is just 85% of the value, the rest being paid for through an interest free equity loan.

With 5% already paid, Taylor-Wimpey will arrange an 80% mortgage and the 15% loan is then repayable over 10 years in three instalments. As well as arranging mortgages and loans, the developer can also tailor incentives to suit a buyer’s unique financial situation, including finding a buyer for an existing property to speed up the purchase of a Taylor-Wimpey home in Colchester. The property market may have been slow over the last few months, but it appears that as Britain’s political and economic future becomes clearer, borrowers feel more confident about investing in a property if it is financially viable.

As the mortgages available become more competitive between lenders, it seems that the property market in Colchester will be able to follow suit after a period of being a primarily rental market. There is a selection of new build apartments on the market that are suitable for single professionals and families, but because it has been difficult getting a mortgage approved, especially for first time buyers, these properties have been on the market for a while.

The popularity of fixed rate mortgage deals is only expected to last for the next six months, and could well be a sign that borrowers are uneasy about potential changes in interest rates due to the current political climate. This has been reflected in the interest in short term mortgage deals as opposed to longer term fixed rate options. With interest rates at a favourable level, locking into a plan for two years is an attractive option; this short term commitment will bring financial security to borrowers until the financial markets find an even keel.

One of the best short term fixed rate mortgage deals available to Colchester residents at the moment is offered by the Cooperative Bank. The two year fixed rate 75% LTV mortgage has an interest rate of 2.95% and 4.1% APR, with the interest reverting to 4.24% after the initial 2 year term. This mortgage deal comes with an £849 arrangement fee, a £140 booking fee and can be used for loans between £5,000 and £1.5m.

Struggling lenders have decided that the best short term solution to their financial situation is to reduce their overall existing debt. To do this, they need to get their money back off their customers who have borrowed large amounts for a mortgage by encouraging them to remortgage with another lender. For their customers to get a mortgage quote that will make the move worthwhile, they need to be able to borrow less than they currently owe. Ergo, it makes sense to wipe off some of that debt in return for getting the rest of the money back. This appears to be a win win situation for lenders and borrowers alike.

At present, these deals are offered on an invitation only basis, and will only benefit those who are considered low risk. With lenders offering to pay up to 20 per cent of a loan, this in effect gives the borrower a much higher percentage of equity in their home, and therefore access to better mortgage rates when approaching competitors to remortgage. However, if your mortgage is with a major bank, don’t expect to be offered one of these lucrative deals.

It is only specialist lenders, and mostly ones that have pulled out of the British market that are offering to buy their customers out, and it is not a practice that the industry want to shout about. So far only GMAC, Edeus and Advantage have admitted to cherry picking the right customers to offer the deal to. However, if you think that you are a good credit risk and you know you have kept up with your repayments, it is worth asking your lender if they are willing to make a similar deal so you can get a favourable quote off another lender.

According to a recent report lending via brokers accounted for 61% of all mortgages in the UK during the first quarter of 2010, up slightly from the previous quarter, with the majority of those borrowers being first time buyers. In fact, of all mortgages secured by first time buyers, 71% were obtained through a broker. The competition at the moment however is fierce, especially with lenders such as the Post Office and Nationwide Building Society offering cheap mortgages directly to Colchester borrowers.

This has reflected the importance of advice when securing a mortgage, and first time buyers have been weighing up the benefits of obtaining advice from a broker and taking the plunge with cheap mortgages direct from lenders. The general consensus appears to be that the advice is worth pricier monthly repayments, a trend backed by remortgagers too.

It is thought that as lending increases, the ability of banks and building societies to take on new customers directly will decrease, resulting in a further boost to the broker market as intermediaries secure cheap mortgages for clients. With greater competition on the horizon, it makes it more likely that Colchester brokers will be able to find cheaper mortgages for their clients.

Colchester has undergone extensive redevelopment in several formerly run down areas. This has been to address the shortage of properties available for a growing number of professional people who have chosen to settle in the area. Most of the redevelopment in Colchester has focussed building plush apartments that were once the ideal first home for Colchester residents. However, as young people wait longer to secure a mortgage for a family home, these flats are coming to the attention of commuters.

These flats are an ideal investment opportunity for landlords who can cash in on the rental market for professional people. A mortgage quote for a buy-to-let venture can be a more difficult deal to arrange, and with so many products currently on offer it is difficult for those new to rental to know where to start and even recognise what a good deal is. The best way to begin to understand the deals available is to compare mortgage quotes online, then approach a lender directly.

The idea is that the better armed you are with what is available, the easier it will be to spot a good mortgage deal when it comes your way. Investors should hurry though as financial experts are warning that banks will begin to restrict lending further to mitigate repayments that need to be made to the Bank of England. Following the emergency support that was offered to lenders during the credit crisis, banks are have to repay the Bank of England a staggering £300 billion by 2014.

Unfortunately, Colchester has focussed regeneration efforts in Myle End and The Hythe on apartment buildings, which remain unoccupied as younger people continue to rent. Experts in the property market have reported an increased number of rentals in Colchester and mortgage brokers have noticed that the demographic of first time buyers has changed dramatically.

Rather than young singles purchasing flats in their late teens and early 20s, first time buyers now tend to be families where the parents are in their mid to late twenties looking for a family home. This means that the push to build apartments to meet the desires of first time buyers has backfired. All is not lost however, as there are plenty of ideal candidates who could snap up these properties as interest rates on mortgages on Essex properties remain low.

Colchester is a popular commuter town, and as property prices in London rise faster than anywhere else in the UK, city professionals would be the ideal residents for the plethora of empty flats in the town. This means there is a fantastic opportunity for property investors who want to cash in on the thriving rental market. Anyone interested in taking out buy to let mortgages for flats available in Colchester should speak to a local mortgage advisor and developers to find the best deals available.