First time buyer confidence 'on the way back'

07-Sep-2007

First time buyers are heading back to the property market, buoyed by slower house price growth and the feeling that interest rates will not rise much further, research from Spicerhaart Financial Services shows.

Signs that many believe interest rates have peaked materialised in an increase in the number of variable rate mortgages being taken out, up from 14 per cent in July to 19 per cent in August, Spicerhaart has asserted.

First time buyers increased their market share by three per cent last month and now account for 40 per cent of all purchases, the study also noted.

"The increase of first time buyers is occurring in spite of [Royal Institution of Chartered Surveyors] Rics figures indicating that getting on to the housing ladder is the hardest it has been since 1990, suggesting that buyers are still determined to own their own property, even if it means borrowing slightly more or accepting help from their families," commented Spicerhaart Financial Services operations director Steve Cox.

House prices rose by just 0.4 per cent in August, adding to the recent underlying trend of sub-one per cent rises, Halifax reported earlier this week.

"The leveling off of interest rates means that in theory house prices should slow down rather," commented Helen Adams, managing director of first time buyer advice site FirstRungNow.com

"This is obviously a good time to review finances and see if you can afford that first home - it seems that many are already doing that," Ms Adams added.

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