Strange messages from the housing market with the latest mortgage monitor from e-surv indicating a 27% drop to the end of June 2015 in the number of first time buyers. The number of first time buyers in June was 7% lower than in May. Various banks, however, are reporting an increase in the number of applications for high loan to value house purchases which would normally be indicative of first time buyers. It will be interesting to see if the number of first time buyers increases over the next few months.
Why is this so important?
As readers of previous blogs will know, the housing market is very much like the food chain and what happens at one end has implications for activity at the other. For a free flowing property market, the number of first time buyers needs to be in excess of 40% of all purchases. I am still very much of the view that first time buyers need support at this time. There is also a requirement for an increase in the number of houses to be constructed, thus ensuring that the UK housing market supply and demand ratio does not get out of sync, causing a housing bubble.
Partner – Head of Property