First-time buyer market share increases

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by Kay Murchie

Analysts are predicting a cut in interest rates next week in an attempt to shore up the market.

The Nationwide has noted a further decline in UK house prices in January with a fall of 0.1%. Consequently, first-time buyers can currently take advantage of these lower prices and the possibility of another interest rate cut by the Bank of England.

Figures from the National Association of Estate Agents (NAEA) have established that first-time buyers currently represent 13% of the market as opposed to the previous month’s figure of 10.1%, indicating a healthy increase in demand.

Stewart Lilly of the NAEA has welcomed the news calling it “encouraging” and it could certainly be a good indication for prospective first-time buyers who are looking for a time when they can buy a property confidently.

Overall, mortgage payments are becoming more affordable, however, the continuing credit squeeze means that some first-time buyers are struggling to secure a mortgage offer.

The Yorkshire Building Society has recently announced that it is reducing the cost of its 2-year fixed rate mortgages and has introduced a £250,000 maximum and intends to implement further reductions on its mortgage range that it will announce this week.

A recent YouGov poll carried out for insurance firm Direct Line has established that the number of UK second homes are predicted to increase 24% in the next 8 years, with the market also expected to grow to an estimated £53 billion by 2018. However, according to the National Housing Federation (NHF), second home ownership is having a negative impact on the UK property market as it is driving prices higher and restricting the opportunities for first-time buyers.