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First time buyers still struggling

23 October 2003
The proportion of mortgages taken out by first-time buyers through financial advisers and brokers has fallen to its lowest level ever, according to a new survey.

Research conducted by Paragon Mortgages found that just 10.5 per cent of mortgages taken out through advisers and brokers during July to September were first-time buyers, compared with 10.8 per cent the previous quarter.

Paragon points out that the proportion of first-time buyers taking out mortgages had fallen during every quarter for the past two years as the boom in housing continues to price them out of the market.

Paragon managing director John Heron commented: "Our survey reflects the inexorable decline of first-time buyer activity over the past couple of years, as they have quite simply been priced out of the market."

House prices have risen 43 per cent since the first quarter of 2001, while loans arranged by first-time buyers have fallen by 45 per cent.

Despite the decline in first-time buyers recorded by Paragon, the total number of mortgages arranged by financial advisers and mortgage brokers during the three months to September rose by seven per cent to an average of 30.1 per broker, up from 28.1 the previous quarter. The number of loans taken out by people remortgaging and the number of loans for buy-to-let properties increased during the third quarter.