propertytalk Live! - Rightmove: Mortgage hurdles prove too high for first-time buyers

propertytalk Live! - Rightmove: Mortgage hurdles prove too high for first-time buyers

The first Rightmove First-Time Buyer Report of 2011 finds that the proportion of buyers intending to purchase for the first time over the year ahead has dropped below one-in-four.

Prospective first-time buyer levels dropped from 25.5% in the final quarter of 2010, to just 22.8% in Q1 2011. This is the second lowest figure Rightmove has ever recorded, just marginally above the 22.2% reported in Q3 of last year.

Rightmove also finds that mortgage challenges are the main factors supressing first-time buyer levels as more than half of respondents stated that their single biggest concern was a mortgage-related issue. Our survey found that 44% of first-time buyers cite ‘raising enough deposit’, and a further 10% ‘meeting monthly mortgage repayments’, as their principle housing concern. These are timely and concerning figures given the imminent mortgage lending summit called by the Government to look into the plight of first-time buyers.

Miles Shipside, director of Rightmove said:

“The level of first-time buyers dropping below one-in-four of all prospective buyers is a big concern for the property market. The desirable level of first-time buyers for a healthy market is typically around 40% of all buyers, almost double the current level, as they perform a vital function in completing chains and aiding fluidity throughout the housing ladder. These findings are likely to heighten government concerns about the scarcity of first-time buyers and it is imperative for the long term
health of the market that a solution to this issue is found.”

Rightmove’s Q1 2011 Consumer Price Forecast reported an increasing sense of price stability among the home-moving public, with around 2 in 5 respondents, the single biggest group, of the opinion that house prices would be at the same level in 12 months’ time. Under such stable market conditions one would expect first-time buyers to be encouraged to get on the property ladder; however Rightmove finds that concerns over mortgage lending are dulling first-time buyer appetites to enter the current market.


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