New buyers 'drop by 20%'

12-Oct-2007

The proportion of Britons classified as first-time buyers has fallen by some 20 per cent over the past six months, moneysupermarket.com has suggested.

A lack of supply as well as continually rising house prices and higher interest rates are to blame for the fall, according to the price comparison website, though the picture may now be improving for prospective homeowners.

The availability of shared equity or joint ownership schemes offers first-time buyers with alternative ways of getting onto the housing ladder, while house prices have shown signs of falling in recent months, according to Rightmove, Halifax and the Royal Institution of Chartered Surveyors.

Moneysupermarket.com says that concerns over interest rates have led to the proportion of borrowers on fixed-rate mortgages reaching 43 per cent of the market, compared with 39 per cent back in March.

According to Spicerhaart Financial Services, however, more borrowers are turning to variable-rate deals as such fears subside. But moneysupermarket.com says that it is not just the base rate that has to be taken into account when looking to buy a first time buyer mortgage.

"The past month has been fraught with uncertainty and lenders have begun acting independently of the Bank of England in terms of rate pricing," advised Louise Cuming, head of mortgages at moneysupermarket.com.

"It looks like the attrition of first time buyers as they either move out of owner occupation or onto second time purchases is occurring at a much faster rate than new first time buyers coming into the market," Ms Cuming added.

But earlier this summer Haart estate agency said it expects numbers to pick up again this autumn as confidence returns.

Buyers forced into the rental sector
http://www.firstrungnow.com/first-time-buyer-news/buyers-forced-into-the-3564.aspx

Second home surge pushing out FTBs
http://www.firstrungnow.com/first-time-buyer-news/second-home-surge-pushing-3570.aspx

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