First time buyer levels plummet
January 5, 2008
According to a recent report from Britain’s largest mortgage lender, the Halifax, first time buyer levels in the UK have plummeted to their lowest in nearly three decades. According to Halifax figures the number of first time buyers that entered the market in 2007 was 300,000, and this reflect a drop of 44% from five years ago as well as being the lowest figure since 1980.
According to officials these figures reflect the difficulties that first time buyers are facing when it comes to getting on to the property ladder.
Soaring house prices, higher interest rates, and difficult credit conditions have made it harder and harder for first time buyers to get onto the property ladder. Figures show that just five years ago the average house price was unaffordable to first time buyers in around 30% of UK towns. However, this has now shot up to 96%. Even the cheapest types of house – the terraced – have become unaffordable in over 70% of towns compare to just 11% five years ago.
One industry professional from the Halifax stated that many first time buyers had been priced out of the market altogether. He said: “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 that there was “no quick fix to the first-time buyer problem” but added: “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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