Before the credit crunch, there weren't many first time buyers in the market; now there is even less. In April, mortgage lenders offered loans to just 18,500 new home owners - a fall of 35 percent compared to the same month last year.Where did the first time buyers go? Anyone with half a brain cell knows that house prices in 12 months time will be significantly cheaper than today. Therefore, anyone with any sense has decided to wait out the crash. Mortgage lenders are also reluctant to give out loans. Again, this is good news since anyone wanting to buy a house right now must be stupid and therefore a very poor prospect for a bone-crushing loan.
So, the low number of first time buyers is good news; a sign that reality and common sense are finally returning to the UK housing market.
8 comments:
I agree with all you write. Last time around (89- c. 95) sellers held on (nonsensically) until they could sell at prices nominally close to the peak of the bubble. Greed knows no limits! If that happens again, first time buyers will not be able to unstick the market for some years yet, maybe as many as eight or ten. B.
did you see the daily mail article about affordability? If prices are going lower and they're out of reach to boot right now, why would a first time buyer jump in?
http://www.dailymail.co.uk/news/article-1026383/House-prices-fall-63pc-affordable.html
I'm worried that there have been ~18,000 people each month who have found themselves entering into a dangerous mortgage.
The flippant answer to the question is "renting", more to the point, can you find the stat's for a longer term chart? How does it tie in with the previous crash?
Ta for the link, BTW.
FTB data is a bit ropey for the 89-95 crash. There might be some annual data.
The link? Any time! I hope it generated some traffic.
Alice
I have no sympathy for those who stretched themselves and are now struggling. They knew the risks, they should have lived within their means.
Since November '07 I've been actively trying to talk friends and colleagues out of becoming FTBs. If I'd been smarter I'd have been doing it since 2006.
The banks are doing FTBs a gigantic favour by not lending to them. Pretty much like refusing to sell crack to a mackem.
Nick
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