Better for the first time?
by Christopher Evans
One of the hardest-pressed groups when it comes to the housing market in recent years has been the beleaguered first-time buyer. During the boom years young people whose parents would have got on the housing ladder in their 20s were finding it more and more of a struggle to do likewise, faced with rapidly growing house prices.
Declining affordability was bad enough, while other social trends - such as people staying single for longer - meant that often the problem was compounded by having only a single income available to pay the mortgage.
Since the onset of the credit crunch, a different problem has emerged. While the affordability problem has eased with the drop in house prices, the difficulty of getting finance has increased, not least with the low loan-to-value mortgage deals available. This has meant that while more people may consider themselves capable of meeting monthly repayments, the upfront costs have presented a formidable barrier.
For those analysing the property market, this has meant that the plight of the first-time buyer has been a running theme in any study. Some might even question whether homeownership is likely to be regarded the same way in the future as it was in the recent past.
For instance, a study by Nottingham University about the buy-to-let sector entitled 'We all Live in a Robbie Fowler House!' after the footballer-turned-property tycoon, stated that not only is the rental sector now deeply embedded in the UK housing mix, but that the 20th century trend towards ever-increasing homeownership will not reassert itself any time soon.
But the National Association of Estate Agents (NAEA) may beg to differ, or at least suggest that any lack of homeownership growth will not be due to a lack of desire among those not yet on the ladder. The latest NAEA figures have indicated a further increase in housing market transactions, with the number of transactions per agent up from eight in March to ten in April.
Moreover, first-time buyers kept pace with this increase, accounting for 23 per cent of the market in both months. This was up from 7.7 per cent a year ago. Such a figure might suggest anything but a falling level of desire to get on the housing ladder.
Overall, the NAEA stated, "this demonstrates that confidence is returning to the market after a period in which potential buyers were holding off from trying to enter the market." The body suggested that any improvements in mortgage availability could help further raise the number of first-time purchases.
Figures from the Council of Mortgage Lenders suggest a similar trend. These indicated a rise in lending during March of 29 per cent from February. For first-time buyers, the number of mortgages was even greater, up 36 per cent.
So it seems clear that plenty of people are still looking to get on the ladder for the first time and the number does appear to be growing. Those wishing to save costs on doing so may wish to avoid using lawyers by picking up a DIY house selling pack.
- Property News from Lawpack: buying or selling your own house? Straight-forward advice on DIY house selling.
Published on: May 20, 2009
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