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First Time Buyers Held Back By Lack of Choice

by Alison Feemantle

Figures revealed earlier this month show that there has been a significant increase in mortgage products available to first time buyers in recent months. Those with a small deposit of 10% or even 5% can now take advantage of around twice as many products compared with twelve months ago, according to the financial information website Moneyfacts.

Those statistics would suggest that first time buyers may help to contribute to a tentative upturn in the property market but a further survey suggests a stark lack of choice when it comes to suitable properties.

Miles Shipside of property website rightmove.co.uk also suggests that the problems regarding affordability and the issues of obtaining a mortgage still remain but the most discouraging fact is the paucity of suitable homes.

The survey began by showing an increase of buyers intending to purchase their first home of 1.4% from the last quarter of 2011 in comparison to the previous three months. This also represents a rise of 1.5% from the same period in 2010.

However, the findings also revealed a significant drop in available properties in the same period with traditional first time buyer homes such as flats and terraced houses being in particularly short supply.

“First-time buyer levels remain well below the historic norm of 40%, but a slight increase of 1.4% on the last quarter of those intending to buy for the first-time offers some encouragement for the year ahead,” Mr Shipside said.

“Our research also provides evidence of an emerging new home-ownership challenge in the form of a lack of available properties that would typically be brought to market by first-time sellers.”

Rightmove pointed to a number of factors that contributed to their figures and many reasons as to why more suitable properties aren’t coming onto the market.

“Owners of these property types, typically first-time sellers, are being deterred from bringing their property to market for a number of reasons. A continued policy of forbearance by lenders and low interest rates means that the market is short of forced sellers,” Mr Shipside added.

“In addition, those wishing to trade up are suffering from a lack of equity, lack of confidence to stretch themselves financially and, in certain micro-markets, difficulty in identifying a suitable property that they would like to move to.”

In the current property climate, it seems that good news is always tempered by cautionary advice and while there may be more mortgage products available for first time buyers, they may well have to be patient in terms of finding that perfect property.

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