Fall In First Time Buyers
We had reached a stage not to long ago in the past, where every time that you bumped into one of your friends or were having a conversation even with a passing acquaintance in the pub, the current property market would come up and you would talk about how much the current climate had added to the value of your home and in the relatively short time in which this jump had happened.
But have you noticed recently, that these conversations have been few and far between. This is because of the current stagnation of the market, which has seen the cost of property rise to such a degree, that the one major player in keeping the momentum going is the first time buyer.
The first time buyer is so important a part of the property ladder, because as and when they get on the first rung, they act as the first link in a chain reaction, as the person that they are buying the property from is looking to move on, to bigger and better things and this will carry on up the ladder.
So because fewer first time buyers, can afford to get on the housing property ladder, due to the increase in house prices, the whole process slows and the value of the homes start to stall and in some case maybe fall.
When you have a look at the figures of first time buyers in 2003 of 532,000 and then compare that to last year where only 361,000 and accounted for 28% of the all borrowers, again down on the high of 50%, you can see why the housing market has levelled out over the last few months.
With approved also seeing a drop of 21% on last year and 28% down on the record highs of 2003, even though there are many first time buyers wanting to purchase their first home many said that this is what they would like to do in the coming year, though more than 90% of those say that they will not be able to do so.
This has led to even the government, trying to help those get their first foot on the property ladder, when the chancellor Gordon Brown raised the zero stamp duty from £60,000-£120,000 and a shared ownership scheme, that would see the buyer only having to mortgage 50-70% of the home and paying rent for the rest.
Even the banks are getting in on the act and the Clydesdale bank recently dropped they’re three year fixed mortgage rate from 5.09% to 4.59%, giving you a saving of £28 a month on a £100,000 mortgage and if there is as expected fall in the base rates, then those first time buyers, will maybe able to start on the road to where they want to be in life.
