New buyers warned not to get ahead of themselves

07-Dec-2007

Savills has said that first time buyers should be careful not to get carried away with the current market slowdown, warning that there remain many barriers to entry within the market.

Though house prices are now finally beginning to fall after years of strong growth, the firm has said that it's only those who have built up cash reserves who will be able to benefit.

The findings tally with a study produced by the Building Societies Association (BSA) earlier this week, which adjudged a deposit to be the biggest issue for new buyers, as opposed to first time buyer mortgage repayments.

Yet it is this lump sum that buyers must look to raise if they are to take advantage of market conditions, Savills has said.

"Clearly a slowdown is going to provide some opportunities for some elements of the market," said Savills director of research Lucian Cook.

"In the short term, it's unlikely to help that many first-time buyers because they're still going to be reliant on mortgage finance, and I suspect that that mortgage finance is going to be harder to come by as a result of the credit squeeze.

"The first-time buyers who [price falls] will help are those who have accumulated relatively high levels of cash reserves, and who are well placed to buy. The people who are well placed to buy are simply going to be fighting through a much lower sea of people, " Mr Cook added.

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