Grant Shapps, the housing minister, hosted a first-time buyer summit yesterday in which he discussed the difficulties facing this group with mortgage lending companies.
The summit certainly had plenty to think about after Rightmove published research data showing that less than 25% of people planning on buying a property this year are first timers. That is almost half the level thought necessary to sustain a healthy housing market.
44% of people in the survey said they could not afford to raise the deposit necessary for a competitively priced contractor mortgage whilst a further 10% expressed concerns over meeting the monthly repayments.
Single people in particular are suffering at the moment with only 25.5% of this group looking to purchase their first property.
Rightmove’s Miles Shipside pointed out that in order to have a healthy housing market you need around 40% of purchasers to be first time buyers.
The UK currently has a situation where 1.4 million people want to own their own property but cannot do so because of the lack of mortgages. Mr Shapps hopes to change that and called on the banks to do more to assist first-time buyers. He would like to see new mortgage products introduced specifically targeted at first-timers to help them get their first foot on the housing ladder.
Shapps will also encourage new entrants to the mortgage market. If Marks & Spencer decided to offer mortgages, that would be welcomed, he said. However, as Tesco have discovered, the regulatory maze does not make it easy for new entrants.
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