First time buyers 'will prop up the market'

26-Oct-2007

The Council of Mortgage Lenders (CML) has said reports that the number of mortgages available to borrowers has seen a sharp fall in recent months will do little to affect the overall prosperity of the housing market.

Last week Moneyfacts revealed that there had been a 40 per cent fall in the number of mortgages on the market in the last three months, figures that alarmed some observers.

The CML, however, has said that it is the twin dynamics of supply and demand that will continue to fuel the demand - and added that first time buyers will have their role to play.

Limited supply has been a longstanding problem, and this in itself is increasing demand because first time buyers feel they must act quickly in order to get onto the first rung of the housing ladder.

This tendency, evidenced by the popularity of schemes such as shared ownership, will still be apparent even if prices fall, despite the uncertainty that will bring, the CML believes.

"I don’t think the availability of mortgages is going to be affected to such an extent that it will affect the housing market, said CML spokesperson Bernard Clarke.

"I'm not sure there is a lack of confidence in the housing market overall. There are still strong aspirations to home ownership and any easing of prices would mean buyers who have been priced out of the market would have opportunities to enter the market and will take them.

"That would ensure that across the whole market – there may be some differences in individual locations – the housing market will continue to be buoyed by that effect," Mr Clarke concluded.

Excess supply could open door for first time buyers
http://www.firstrungnow.com/first-time-buyer-news/excess-supply-could-3578.aspx

Buyers 'to benefit' from slow sales
http://www.firstrungnow.com/first-time-buyer-news/buyers-to-benefit-3580.aspx

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