First-time buyer numbers at a 20 year low
The number of first-time buyers in the UK property market hit a 20 year low in the year to February with just 347,000 new entrants to the property market. While this compares a little more favourably to the 331,374 a year earlier it is well below the figure of 700,000 back in 2004/05 and perfectly reflects the difficulties facing the UK property market.
There are also concerns that the UK government's stamp duty holiday for properties valued at under £250,000 will have little impact in the short to medium term unless more financing is made available by the mortgage sector. When you consider that first-time buyers are the food and water of the UK property market it is difficult to see how we can expect a significant increase in activity and property prices in the short to medium term. So what is going wrong?
Aside from the lack of liquidity in the mortgage market, especially for first-time buyers, many mortgage lenders have also increased their deposit requirement which has effectively priced the vast majority of potential first-time buyers out of the market place. Until deposits are reduced, liquidity is increased and more promotions announced for first-time buyers we are unlikely to see a marked increase in the number of new entrants to the property market.
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