by Mark Johnston
First time buyers remain resilient.
There is still a minefield of economic uncertainties to navigate for those intending to purchase their first home.
Despite this it seems that the number of young professionals looking to get a foot on to the property ladder has risen to the highest level in two and a half years, according to property website, Rightmove.co.uk.
Paul Smee, the Council of Mortgage lender’s (CML) director general, said “first time buyer activity is showing some signs of resilience as we move away from the obvious effects of the stamp duty concession, a trend that it would be good to see maintained”.
First time buying boosted lending figures in June, figures showed that some 19,200 loans were handed out to first time buyers, which is 9.1% up on May and also up 3.8% on the same month a year earlier.
These same figures also reveal that lending to first time buyers was at its highest point since July 2010, with the exception of March 2012, when the figures were boosted temporarily by the looming end to the stamp duty concession.
Other data has shown that a return to a more normal pattern of activity maybe starting to occur, with half of first time buyers purchasing properties priced between £125,000 and £250,000.
This ‘surprising determination’ comes despite the end of the stamp duty concession which was then followed by a dip in mortgage lending, tougher employment conditions, mortgage rate hikes and lenders yet again tightening their lending criteria’s.
Miles Shipside, director of Rightmove.co.uk, said “the results come as a welcome surprise. The property market needs this upward trend in first time buyer activity to continue, as first time buyers perform an essential role at the bottom of the property market food chain”.
Mark Harris, chief executive of mortgage broker SPF Private Clients, added “it is encouraging that this sector is showing some resilience but many first time buyers will inevitably be relying on their parents to help with a deposit”.
Professor Mark Stephens, of the University of Glasgow, has suggested that “the only ones able to afford a deposit on a home will be those who can turn to rich parents”.
A recent report pointed out that ‘on current trends it will not be long before only one in four couples will be able to afford to buy their own home. This will therefore lead to a lost and increasingly angry generation of thwarted buyers.
First time buyers have suggested that raising a deposit is their biggest concern. Many aspiring home owners are trapped in the rental sector and are desperately trying to save to raise the high deposit now needed in order to buy a house.
Despite first time buyers being resilient in the face of high deposits and tighter lending conditions, the International Monetary Fund (IMF) is back on its regulatory hobby horse, pushing for new powers for the Bank of England to curb the amount home buyers can borrow in order to prevent damaging property prices.
This however has been met by universal criticism from many experts who believe that this would cause considerable unintended harm to consumers, particularly first time buyers.
Story link - First Time Buyers Remain Resilient.
Related stories to : First Time Buyers Remain Resilient.