Despite positive news from NAEA members regarding the number of homes being sold since Christmas, the same sentiment cannot be applied to the prospects for first-time buyers.
This week, the Guardian reported on the continuing slump in mortgage approvals. With only 28,932 loans approved in January, the property market will struggle to sustain any reasonable growth particularly as this number is less than half the average monthly level seen since 1997.
The increase in the demand for homes in January is a reminder that, despite ongoing financial problems, there still exists a large number of people desperate to get on to the property ladder. There is a clear and obvious risk that an entire generation of home buyers are locked out of home ownership.
The most recent CML figures have suggested that first-time buyers need just over a year’s salary as deposit on a new property. Based on an average salary, this works out at £34,388. This represents a huge increase on the levels seen in 2007, where the average deposit was just 37% of the yearly wage (£12,723). These deposit figures are another indicator of the challenges facing first time buyers, with capital barriers to home ownership growing disproportionately.
The housing minister, Grant Shapps, has urged lenders to offer more to first-time buyers. He said: “There are 1.4m households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability. We want to do more to help aspiring first-time buyers.”
I wonder whether the Government might need to produce more than words in this respect?
As well as measures that could be taken by the banks, agents have their part to play too.
Experience is critical in managing client expectations at a time when there is so much uncertainty in the wider economy and this feeds into both buyer and seller behaviour.
With economic data changing daily, and mortgage requests being refused by banks, changes can occur throughout the sales process. More than ever, communication is of vital importance to ensure that both sellers and buyers know and understand their position.
If they are able to offer their customers the best possible service, based on a thorough and sound knowledge of the market, it should help those struggling to buy their first home to choose wisely from the options available to them.
Comments
Who ever you are (unidentified):
Ar you prepared to agree that flats and houses, designed and built for first-time buyers, need to be priced within the reach of first-time buyers?
Please also identify yourself.
What utter rubbish that last post is.
Are you seriously suggesting that people should sell there home below market value to accommodate First Time Buyers.
Why should that be done?
IF FTB can't afford to buy, they can't afford it. Im not suggesting prices shouldn't be corrected, but on your theory prices would have to drop massively.
Secondly, to get the whole market responding, prices of houses or flats for first-time buyers, should be pitched at affordable levels based on earnings, and without the buyers having to resort to excessive borrowing.
If this could be accomplished, and everything in the rest of the market geared from there, price-wise, a recovery would follow.
There are plenty of aspiring first-time buyers, when the available property is priced within their means, the market can return to activity.
Don’t you agree that the increasing gap between the prices agents are currently trying to sell houses for and the prices they are actually selling them for, is causing the market to stall.
It is said that less than 40% of houses placed on the market currently sell within the year!
Doesn’t this mean that something is broken, as far as the process of marketing with estate agents is concerned, and won’t you investigate this as a priority to try and improve things?