Mortgage brokers are expecting to see a slight rise in the number of first time buyers entering the market for the first time in 18 months, according to the Intermediary Mortgage Lenders Association (IMLA).
For the first time in a year and a half, the IMLA's survey of mortgage
intermediaries has uncovered expectations of a rise in first time buyer mortgage business over the next two months.
Times have been tough for people trying to get a foot on the property ladder recently, as record low interest rates have been slow to trickle down to would-be first time buyer mortgage
customers without significant deposits.
But the IMLA suggests that the recent feedback from brokers indicates the tide might be turning for first time buyers struggling to enter the market.
In the last few weeks, several mortgage lenders
have moved to make it easier for first time buyers, offering higher loan to value (LTV) mortgages, and more competitive rates.
While growth still remains low, with activity for first time buyers up by 0.9 per cent on average, the IMLA believes that "this may reflect a turning point as intermediaries start to see a symbolically important return of confidence and activity to the market."
Brokers have made consistently negative projections for first time buyers since summer 2007, when the market started to slide. The first time buyer mortgage market's lowest point came in May last year, when brokers predicted business from first time buyers to decline by nearly five per cent.
In line with their projections, actual mortgage business has fallen significantly since late 2006, when they peaked at around 20 loans per office, per month. By July 2008, approvals had fallen to 16, and are now at 10, in line with the contraction in lending, but the reports of stabilisation in the market signal a more optimistic outlook, the IMLA said.
"We are not out of the woods yet but there are early tentative signs that the market is starting to return - at least from intermediaries' perspective," commented Peter Williams, executive director of the IMLA.
"Further work still needs to be done to improve availability of mortgages in the sector, however," he added, "for example by way of government initiatives to support specialist lenders and the full spectrum of building societies."Get mortgage quotes & advice »
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