First Time Buyers Figures – Highest in Five Years
The amount of First time buyers in the housing market has risen for the first time in five years according to research carried out by the Council of Mortgage Lenders (CML). They compared the amount of loans given out to first time buyers in February 2013 with the same month a year before and saw a rise of 17%.
This is not typical of the whole housing market though. The loans to people who moved house actually fell and the amount borrowed by movers also fell.
The director general of the CML commented on the figures, explaining that the conditions were more favourable for first time movers now and so many were taking advantage of that. He also said that he was hoping that the government initiatives brought I the budget should hopefully help those who want to move house as well.
There were two schemes brought in by the government during the budget. One was to enable borrowers to take an equity loan form the government so they only needed a 5% deposit on a property which began on the 1st April. The other scheme will involve the government guaranteeing up to 15% of a mortgage. This will be used to support £1340bn worth of mortgages.
It has been predicted that these measures will help the housing market to slowly recover and it seems that there are some early hints of this anyway. However, there have been predictions that housing transactions will go up by 7.5% in total over the course of the year and that house prices will subsequently rise by 2.1% next year and 5% the year after.
It is expected that these changes will particularly help sales at the lower end of the housing market. The predicted rise in prices could harm some new buyers though, but if they take advantage of one of the government incentives it may outweigh the effects.
Many people are reluctant to borrow money or to borrow more money which is why the housing market is so still. There may be people looking to downsize, as they do not have enough money for their current bills, but with a lot of people not interested in moving up the housing ladder at the moment, it can make it difficult to find buyers. With financial help, it should mean that there will start to be more movement in the housing market and this should have a knock on effect with more and more people buying and selling.