First Time Buyers Return to the Market.

by Mark Johnston

First Time Buyers Return to the Market.

It seems that first time home buyers are rushing back to the market as confidence grows and mortgages become increasingly available.

The latest housing data shows confidence and activity growing strongly at the bottom of the property ladder.

first time buyers 1Figures from the Council of Mortgages Lenders (CML) show 68,200 first timers purchased property in the second quarter of the year from April to June, which was the highest quarterly number since the pre-crisis peak of the property market in 2007.

Other data also suggests that since 2007 first time buyers have accounted on average for 38 per cent of house purchase loans. This latest quarterly data shows the figure to have risen to 46 per cent.

Brian Murphy of national broker firm, The Mortgage Advice Bureau, said: “This section of the market is looking stronger than it has done for some time.”

Shelter, the housing and homelessness charity has predicted that despite evidence of a recovery in mortgage finance and transactions, home ownership will continue to decline in the UK.

The fact is Britain is simply not building enough houses. Current analysis suggests that the UK needs to build 250,000 homes every year just to meet current needs, let alone tackle the backlog. Yet in England, we are building less than half of that.

Therefore this has meant that landlord lending has boomed in the past few years.

The Council of Mortgage Lenders (CML) figures showing £5.1 billion was advanced to landlords in the three months to the end of June, almost a third higher than the figure for the same period in 2012.

The Council of Mortgage Lenders (CML) head of policy, Jackie Bennett, said: “Strong rental demand has contributed to the continuing expansion of the buy to let sector.”

James Lloyd, director of the Strategic Society Centre, said “the last decade has seen the unending growth of the private rented sector, with more and more private tenants trapped renting seeing their dreams slip away.”

Matthew Pointon, a property economist at Capital Economics, said that many would be first time buyers living in the rental sector are still finding it a “challenge“ to make the jump onto the property ladder.

Research has revealed that the number of rental properties has skyrocketed in the last ten years from 2 million in 2000 to 3.6 million today.

This said many industry insiders believe that buy to let landlords are blocking first time buyers from getting a foot on to the property ladder and are therefore a barrier to social mobility.

However, a recent study by a credit ratings agency suggests that as buyers return to the housing market some landlords are struggling to find tenants.

It seems that the number of properties advertised to let increasing sharply between April and June.

Research by Experian, the credit referencing agency, showed the number of properties listed “to let” in the UK increased by 11.4 per cent in April and June compared to the same period last year.

The fact is though it is unclear how severely, if at all, an uptick in home buying could dent the buy to let market.

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