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FTB numbers plummet to 20 year low

FTB numbers plummet to 20 year low

Category: Mortgages

Updated: 21/04/2010
First Published: 21/04/2010

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 It is now over 6 months old so the content may be out of date.
Home ownership appears to be but a distant possibility for a significant number of potential first time buyers , with numbers at a two decade low.

Just 347,000 people took out a mortgage for the first time in the last year – 100,000 fewer than the previous 12 month low that was recorded in February 1993.

Over the last 20 years, an average of 561,000 first time buyers have been able to secure a mortgage each year, with a high of 700,000 recorded in 2004/05.

The research from GfK NOP suggests that a combination of rising house prices and tightened credit conditions are having a detrimental effect on young people's chances of gaining a foothold on the property ladder.

It is thought that more than 800,000 people aged 30 or under have designs on becoming homeowners for the first time in the next year, but that less than half will be able to do so.

A lack of capital represents the biggest stumbling block, as less than one in six hold sufficient funds to meet deposit requirements, meaning the new stamp duty holiday for first time buyers on properties worth under £250,000 is unlikely to have much impact.

"The Financial Research Survey tells a story that is keenly understood by millions of young people across the country," commented Ben Steer, GfK financial director.

"Increased prudence on the part of lenders has priced many out of the housing market – the challenge for these financial providers is to create products which will assist young people, without creating the conditions that sparked the crisis in the first place."

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