Property law: Increase in first-time buyers in property market

Property law: Increase in first-time buyers in property market

Thanks to mortgage lenders offering high loan-to-value ratio mortgages, the number of first-time buyers is growing. During April 2011, 27% of mortgage approvals were for properties valued at less than £125,000 and 79% were for properties worth less than £250,000.

The total number of mortgage approvals in April rose 1.8% on March’s figures – from 47,577 to 48,435.

Property experts claim that first-time buyers are realising that renting costs are rising and so becoming a homeowner is making more sense “especially with lenders now keener to offer fixed-rate deals”.

Other experts believe that the increase in lower-value properties being purchased does not necessarily indicate an increase in first-time buyers, but instead an “indication of a falling market” or “signs that lenders are favouring buy-to-let” borrowers.

Matt Griffith, of first-time buyer website PricedOut, thinks that it is still “very tough for young people to get anywhere near the housing ladder”. He advises first-time buyers to not “get too excited that their housing troubles are over”.

Whether the market is being flooded with first-time buyers or not, mortgages for lower-value properties are being approved. And the result of this is that property chains will become unlocked at the top end of the property ladder.

Evidence of this has already been seen in the south of England and London. The number of properties purchased in those areas that were valued at over £1million has increased by five times in recent months.

According to the LSL Property Services/Acadametrics house price index, as a result of these purchases the average London house price increased by 4.3% and in the south-east by 1.8% over the last three months.

Several properties in the City of Westminster sold for an average of £6.9million and 13 properties in Camden sold for an average of £3.1 million. Although in other regions of England and Wales, house prices have dropped.

Related links:
Read more on this story (Guardian)
Read about buying and selling property (FindLaw)
Find local property solicitors throughout the UK (FindLaw)

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