Record low for first time buyers
22 September 2003
The number of first time buyers fell to a record low in August, according to new figures.
The National Association of Estate Agents (NAEA) revealed that the number of people taking their first step on the housing ladder fell to just 13 per cent of sales - compared to a long-term average of 25 per cent.
The fall follows a slight recovery in the number of people buying their first home during July, with first-time buyers accounting for 17 per cent of sales, up from 14 per cent in May.
The NAEA is now calling on the government and lenders to take action and ensure the homebuying process is more accessible for first time buyers.
Melfyn Williams, president of the NAEA, said: "While the market is not in recession, the acute shortage of first-time buyers is threatening to log-jam sales in progress higher up the chain.
"Without first-time buyers the market could falter due to large chains of agreed deals being unable to complete."
He claimed that lenders were being over-cautious in the amount they would let people borrow, despite interest rates being at their lowest level for more than 50 years, and called on them to introduce more products designed to help people get on to the housing ladder, such as guarantor mortgages. With these people can borrow higher income multiples if their parents are willing to act as guarantors.
Mr Williams said: "The Government should also encourage first-time buyers. Abolishing stamp duty for first-time purchases would be a welcome step."
The NAEA revealed that annual house price inflation continued to fall during August, with prices just 6.9 per cent higher than they had been in the same month of 2002, compared with an annual rate of house price growth of 18 per cent in January.
It said it was also now taking an average of 17 viewings to sell a house compared with 15.7 the previous month, while people were getting 95.6 per cent of their asking price down from 96.6 per cent in July.
However the number of sales increased slightly to 14.7 properties per agent, compared with 11.1 last month.