RESIDENTIALsales
FTB or not to be?
Fritz Graves asks the question, where is the first time buyer?
W
orking in the current property market can be a complex business as predictions for the future of the housing
market vary widely from week to week. Numerous articles containing a range of facts and figures are released every day from all manner of sources commenting on the state of the market. For example, the National Institute of Economic and Social Research (NIESR) predicts that house prices will fall 10.5 per cent in real terms over the next five years, whilst the Centre for Economics and Business Research (ECBR) predicts that prices will rise by 15 per cent due to an increasing shortage of housing. Everybody needs somewhere to live.
We are forever being told the pros and cons of buying or renting, how much house prices have risen or fallen and where we can procure the best mortgage to join the more and more exclusive club of home ownership. Conflicting advice and predictions aside, one factor that is certain is the dismal situation of the first time buyer. At the end of 2011, the first time buyers’
share of the housing market fell to a three year low of 16 per cent, and despite government measures which include home ownership schemes and a proposal to increase right to buy discounts for council tenants, the future looks increasingly grim for those trying to get onto the property ladder. However, if the housing market is to recover over the next few years, it needs to re-introduce the stimulus of first time buyers entering the system. Without them, the housing ladder
becomes top heavy - And creates an issue for everybody else on it.
26 FEBRUARY 2012 PROPERTYdrum
THE STATE OF THE NATION The recent publication of the National Housing Federation’s report into the state of the UK housing market highlighted a number of issues that will further affect the first time buyer. The report estimates that rents will rise by an additional 20 per cent over the next five years, which may act as an incentive to invest in purchasing a property as rental prices become increasingly expensive. Levels of home ownership in the UK
are predicted to fall to 63 per cent over the next decade, primarily declining amongst younger generations. Levels of house building are at their lowest since the 1920s, with only 105,000 new homes built last year. It’s impossible to find a solution without
knowing the cause – so why aren’t more young people buying? Some people point
to a shortage of suitable mortgages, but the reality is that there are still plenty of reasonable mortgages on the market. In fact, in December of last year (2011) the Council for Mortgage Lenders stated that mortgage payments for first time buyers are at the most affordable level for nearly eight years. This is hardly surprising given the fact that the Bank of England has held interests rates at the historic low of 0.5 per cent since March 2009. However, access to an affordable
mortgage is only half the issue as many first time buyers find themselves unable to afford the large deposit required. Yet, whilst it’s true that the best interest rates are kept for those with large deposits of 25 per cent plus, some lenders are offering attractive schemes for first timers. At the end of 2011 Leeds Building Society joined two other lenders, Saffron Building Society and
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68