Fall in first time buyer levels
January 5, 2008
The Halifax, Britain’s largest mortgage lender, has recently released a report that shows first time buyer levels have fallen through the floor this year, resulting in the lowest first time buyer levels in close to three decades. Around 300,000 first time buyers are said to have entered the property market in 2007, and this is the lowest since 1980. It also reflects a 44% drop compared to five years ago.
First time buyers have found themselves facing a range of difficulties over recent years, and this has resulted in many of them being priced out of the market altogether. Firstly came soaring house prices, which made it difficult to find an affordable property. Next came increasing interest rates, which made it more difficult to afford repayments on a mortgage. And finally increased difficulties in the credit and finance sector due to the credit crunch also took its toll on first time buyers.
One industry expert stated that there was no quick fix to the problem with first time buyers, stating: “When they do enter the market, first-time buyers are now more likely to be in their 30s rather than their 20s and buy a flat rather than a terraced house.”
He also stated: “A more subdued housing market over the next few years is a positive step for potential new entrants. Lower-than-average earnings house price growth together with more government initiatives may, in time, address the issue.”
Another industry professional stated that government intervention was required, stating: “What we need now from the Government is some action — proactive steps aimed at helping this vulnerable group onto the property ladder.”
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