Mixed messages over first time buyer problems

19-Jul-2007

The annualised rate of growth in the housing market rose from 10.7 per cent in May to 11 per cent in June, an assessment of the five major UK house price indices has revealed, with first time buyers suffering the most.

While price growth is expected to slow somewhat over the rest of the year, higher interest rates have nonetheless already had an impact on first time buyers, according to the Assetz House Price Watch.

"First time buyers and tenants of rented property are the main losers of another rise in interest rates this month […] while we expect the rate of property price growth to reduce over the coming months, it looks set to remain buoyant at around eight per cent," commented Assetz managing director Stuart Law.

However, figures from the National Association of Estate Agents (NAEA) implied that this was not the case, with first time buyers increasing their share of the market from 8.9 per cent to 9.8 per cent in June.

"The next few months are likely to be characterised by consumers being cautious due to uncertainty surrounding future economic movements and recent government changes. Buyers and sellers have been reacting to mixed messages over the likelihood of further rate rises," advised NAEA president Stewart Lilly.

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