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FTB numbers forecast to fall

FTB numbers forecast to fall

Category: Mortgages

Updated: 15/12/2011
First Published: 15/12/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

First time buyers are set to remain in short supply in 2012 as deposit requirements and mortgage availability continue to take their toll.

Only 23% of those intending to buy in the next 12 months will be buying for the first time, according to the latest research by Rightmove.

Not only is the figure down on the 26% reported a year ago, the gap has also widened from the pre-credit crunch level of 40% which is typically associated with a healthy housing market.

"The first time buyer remains an endangered species," said Miles Shipside, director of Rightmove.

"They perform an essential role at the foot of the property market food chain in allowing sellers on the bottom rung of the housing ladder to trade up, and this makes them highly-prized.

"With prospective first time buyers even thinner on the ground than at this stage last year, sellers and their estate agents operating at the lower end of the market will need to fully understand the DNA of this group if they are to capture a sale."

The study also revealed that the average age of those who expect to buy for the first time next year is 32.

The property website said the age it has polled is younger than is commonly reported because of the age difference between those who can afford to buy and those who cannot.

It points out that 'trapped renters', who would like to buy but can't afford to do so, have an average age of 35.

"There has been a lot of speculation about the average age of first time buyers, and the truth is those who can are in their early thirties, while those who can't are in their mid-thirties and counting," added Mr Shipside.

"Those who would like to buy but cannot afford to are watching the grains of sand slip through the hour-glass of life.

"They try to top up the glass by saving a deposit, but lack of mortgage finance and Father Time are combining to further postpone their prospects of buying.

"Given the reality of the ongoing economic situation, many trapped renters are having their homeownership dreams postponed to their forties at best, or permanently shattered at worst."

The research also revealed that those purchasing for the first time expect to put down a very significant deposit in order to do so.

More than half (56%) anticipate putting down £20,000 or more, with the overall average deposit at £22,000.

Raising a deposit remains the most commonly expressed concern amongst prospective first time buyers (36%), although there has also been a jump in those citing worries about personal financial security.

Find the best mortgage for your first home - Compare first time buyer mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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