First-time buyers looking to take advantage of market
First-time buyers looking to take advantage of market
Wednesday 6th May 2009
New research claims the majority of first-time buyers are looking to take advantage of the current housing market.According to Rightmove's study, 69 per cent of potential first-time buyers believe now is a good time to buy. The shift in sentiments is said to be heavily influenced by over half of the aspiring buyers expecting prices to remain the same or increase over the next year.
Miles Shipside, commercial director of Rightmove said: "It's a clear sign that the mood is swinging from negative to positive when first time buyers are looking to re-enter the market.
"Canny investors have been snapping up some bargains, and now first time buyers reckon prices are reaching a floor too. They are looking to take advantage of cheaper prices before they start to rise. Some will be frustrated by the size of deposit lenders are demanding to get the best mortgage deals however".
As a potential alternative to outright purchase, 43 per cent of the 3,120 potential first-time buyers said they would consider buying through a shared-ownership scheme - one of the initiatives addressed in chancellor Alistair Darling's Budget last month.
Mr Shipside added: "First-time buyers have had a tough time in recent years with the seemingly endless upward trend in property prices, with many having no option but to rent or work out an arrangement with family. However, chain-free, they could be one of the main beneficiaries of a market like this.
"The scarcity of buyers in a position to proceed and the increase in the number of forced sellers has meant that some first-time buyers are able to snap up deals at 25 per cent below peak prices. However, for those without a large deposit, shared ownership is still a realistic route that offers a helping hand onto the housing ladder."
He added that policy makers and mortgage lenders need to take the plight of frustrated first-time buyers seriously and consider the effects of cherry picking equity rich buyers who are trading up, in preference to first time buyers with lower deposits.
"The result is short-chains which are counter productive to the long-term health of the housing market. First-time buyers help begin a chain and over the years they then move up though the rungs of the housing ladder creating greater liquidity of the housing stock," he concluded.
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