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In spite of the fact that the number of first-time buyers has dropped to its lowest level in the past decade there has been a significant rise in the number of affordable homes over the past year. This is according to figures released by the Halifax.
Factors which may have contributed to this include:
• recent increased price rises in some areas
• the lack of money for a deposit
• stricter lending requirements by the banks and building societies
• A drop in market confidence enhanced by job losses and the recession
• a drop in the number of mortgage brokers and mortgage products for the market
• A reluctance of first-time buyers to take the risk – lack of confidence in the market.
• reduction in market confidence and a creative approach to property investment.
The Government
The public sector will lead the way in the house building and funding around half of all new homes. The issues facing first-time buyers will remain at mortgage availability and indeed the overall supply of homes. The increasing demand for new homes has not gone away. The 75% loan to value remains what is available to first-time buyers – as a result there is no easy solution to this.
The general election could result in public spending cuts higher taxes and interest rate rises depending on which party wins. Rising unemployment will also output the dampness of the potential buyers with the fear that they could lose their job.
The Lender
Expecting a strong recovery in house prices with a more natural supply of properties returning to the market. However the interest rates are expected to remain supportive for the housing market which would prevent significant drops in house prices.
Generally we are likely to see the kind of movements which we saw in 2008. Owing to the conservative nature of the lender such practice is expected in the year 2010. The lenders will maintain a high deposit to lending ratio. The opportunity for 100% mortgage to can now be safely considered as a historical event.
The Mortgage Broker
As expected deposit has led a two a dwindling number of first-time buyers in the year 2009 judging by their inability to raise the expected down payment.
Loans with the considerably smaller deposit will obviously be an expensive product for the current buyers.
Addressing the two main issues at mortgage availability and supply of new homes will clearly help. There are opportunities with affordable housing programs and this is proving to be popular with the first-time buyers to lowering the constraint of a large deposit.
The Estate Agent
Apparent swings in the market have been based on the reduction of the VAT and stamp duty thresholds. Since this has come to an end, we should expect an increase in buyers in the first quarter of 2010 – subject to lending and the supply of property.
The First-Time Buyer
The response made by a number of first-time buyers have been varied in terms of their candid opinion about the year 2010 as expected the number of first-time buyers has dwindled and they understandably remain skeptical.
• It will still be difficult for those who do not have savings
• more buyers are saving or asking parents for money
• it is a good time to buy if they are able to get the money
• high deposit will serve as a caveat in the process for the first-time buyer
• hundred percent mortgages may be a thing of the past
• Intervention by the government may play a pivotal role in stabilizing the market and increase the value and significance of home buyers.
The size of the deposit for a first-time buyer would play a role in the purchase of property. Though a percentage of properties in specific regions of the UK are now affordable as research indicates, a cautious approach remains. The improved affordability has come about through a combination of lower interest rates and house price falls. However, it still remains that many first-time buyers are unable to take advantage of the situation. Let us hope this year brings about an improvement in the market with the support for First Time Buyers.
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- First-Time Home-Buyer Loans Advice (usa.myfirsthomeblog.com)
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