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Mortgage shortage freezing out first time buyers

Mortgage shortage freezing out first time buyers

Category: Mortgages

Updated: 14/12/2010
First Published: 14/12/2010

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 It is now over 6 months old so the content may be out of date.

A shortage of first time buyers contributed to a slowdown in housing market activity during November.

House prices once again slipped lower last month, according to the Royal Institution of Chartered Surveyors (RICS), although the latest figures represent a slight improvement on October.

Surveyors said a lack of demand for properties continues to stifle the market, with enquiries from new buyers falling for the sixth consecutive month. First time buyers were said to be in particularly short supply, as they struggle to find the large deposits required by lenders. The lack of mortgage finance also remains an obstacle.

Meanwhile, RICS said the sharp rise in the number of houses being put up for sale on the market since the spring appears to be fading, after new instructions from prospective sellers dipped for the second month in a row.

Surveyors reported that many would-be sellers have decided to wait until the new year to put their property on the market.

Meanwhile, the average number of sales per surveyor decreased, with just 14.8 sales on average taking place over the last three months. Looking ahead, although surveyors are anticipating further house price falls over the coming three months, sales expectations are more upbeat than they were.

"There was little change in the housing market in November; prices continued to edge lower and sales levels generally remained subdued," said RICS spokesperson, Ian Perry.

"Despite some better economic data, fears over how future spending cuts will impact on the jobs market are clearly still weighing heavily on potential purchasers' minds, with many deciding to 'wait and see' until the new year.

"Meanwhile, the lack of mortgage finance continues to deter first time buyers."

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