First Time Buyer News

The last fortnight got off to another shaky start when the British Bankers' Association (BBA) revealed that the number of loans approved for house purchase had fallen to their lowest level since 2000, seemingly continuing a long-term trend that was unlikely to improve in the near future.

"Lower amounts of new mortgage lending and fewer loans approved for house purchase signal a weaker outlook for the mortgage market," commented BBA director of statistics David Dooks.

However, at the time the Royal Institution of Chartered Surveyors (Rics) pointed out that the problems were likely being exacerbated by some lenders removing first time buyer mortgages from the market, and while it's true that this is something of a negative qualifier, there was good news further down the road for new buyers.

Two separate suggestions, made by the Council of Mortgage Lenders (CML) and SmartNewHomes.com, both pointed to a rosier picture for those looking to get onto the first rung of the property ladder.

The new homes website suggested that developers wanting to post good year-end financial results are now beginning to offer better deals to first time buyers in an effort to attract them back to the market. The CML, meanwhile, said that Britons' desire to own their own homes would continue to propel the market forwards.

"There are still strong aspirations to home ownership and any easing of prices would mean buyers who have been priced out of the market would have opportunities to enter the market and will take them," CML spokesperson Bernard Clarke noted.

This in turn was supported by research from Fairinvestment.co.uk, which found that though mortgage enquiry figures had dropped over the past quarter, the number of first time buyers making such enquiries had risen from 77 per cent to 92 per cent of the market between Q1 and Q3.

"Britain's love affair with the property market is far from over, despite the recent dip and the gloomy forecasts for the next few years," proclaimed Fairinvestment.co.uk director James Caldwell.

Mr Caldwell also noted that the uptake of 100 per cent mortgages was also on the increase, and while he cautioned that saving for a deposit was usually a safer option, separate research also suggested that 100 per cent deals are becoming more and more popular.

According to the Mortgage Advice Bureau (MAB), the number of borrowers who took out a mortgage with a loan to value of 100 per cent or more doubled in the first nine months of the year in comparison to 2006.

The MAB joined mform.co.uk in warning buyers of the risk of negative equity that such deals provide, even though the majority of housing forecasts see house prices rises of between 0 and three per cent next year.

The question of where new buyers get their mortgages from was also under the microscope towards the end of the month, with research from Moneyfacts.co.uk finding that it is building societies, rather than the big name lenders, who provide the vast majority of the most competitive mortgage deals.

"The findings show that, for the majority of borrowers, the deals from building societies and smaller lenders are winning hands down," said Moneyfacts mortgage expert Julia Harris.

Moneyfacts was also joined by broker Alexander Hall in suggesting that mortgage advice is crucial in the current financial climate.

Elsewhere the government announced more details of its ambitious plans to boost the UK's housing stock, with housing minister Yvette Cooper revealing that councils would now have more of a say in how land is developed in their region.

In response, the National Housing Federation said that encouraging councils to release more land would still be a priority despite such measures, and if a study from More Than is anything to go by then someone should also look at helping furnish new buyers' properties – 60 per cent of respondents to the insurer's study said that funding decorating work and furniture was a problem for them in their first home.