First time buyers get optimistic

27 June 2005
More and more first time buyers are taking advantage of the possibility of a cut in interest rates to get a foot on the property ladder, according to Mortgages Direct.

The financial services provider's survey for May reveals that first time buyer levels increased by five per cent last month to make up 40 per cent of the total mortgage applications received.

This increase in first-timers coincides with a general optimism from mortgage borrowers about an imminent decrease in interest rates - tracker mortgages saw an eight per cent increase in applications in May.

"Despite the Bank of England's decision to freeze interest rates for the time being, the substantial increase in the percentage of borrowers opting for tracker mortgages and variable mortgages over the past month hints that consumer confidence has switched," said Peter Gladdy, director of Mortgages Direct.

"There is a growing belief that the Bank of England will decide to lower the interest rates in the imminent future."

The two-year fixed rate deal is still the most popular, Mortgages Direct found, with 44 per cent of borrowers opting for two years, 19 per cent choosing three years, and 25 per cent preferring deals lasting five years or more.

Click here to find out more about first time buyer mortgages.

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