Ahead of the Government’s summit into first-time buyer lending on Tuesday, Rightmove’s first 2011 First Time Buyer Report has found that first time buyer levels have now dropped below 1 in 4 of all UK purchasers citing mortgage lending as being too high a hurdle.
The proportion of first time buyers set to enter the market has fallen from 25.5% to just 22.8%. The levels of prospective first time buyers is now around half the levels that are typical of a healthy housing market with more than half of the first time buyers advising that mortgage issues are the single biggest issue faced when trying to get onto the property ladder.
There is speculation that coupling-up will soon be the only way to get on the ladder with first time buyers purchasing with a partner or spouse now making up almost three quarters of those entering the market.
This is the second lowest figure Rightmove has ever recorded and is slightly above the 22.2% reported in Q3 of last year. Rightmove’s survey found that 44% of first-time buyers indicate that raising enough deposit was their main concern with a further 10% advising that meeting monthly mortgage repayments being their principle housing concern.
Rightmove say that these are quite concerning figures given the imminent mortgage lending summit called by the Government which will look into the difficulties faced by first time buyers.
Miles Shipside, director of Rightmove comments:
“The level of first-time buyers dropping below one-in-four of all prospective buyers is a big concern for the property market. The desirable level of first time buyers for a healthy market is typically around 40% of all buyers, almost double the current level, as they perform a vital function in completing chains and aiding fluidity throughout the housing ladder. These findings are likely to heighten government concerns about the scarcity of first-time buyers and it is imperative for the long term health of the market that a solution to this issue is found.”
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