A drop in first time buyer numbers in the UK is causing concern in the nation’s property market, as finance remains difficult to obtain.
The latest figures from the National Association of Estate Agents shows that sales remained strong across the property market in September but the number of house hunters has fallen for the second month in a row.
There are more properties coming onto the market and it is the drop in first time buyers that is worrying as they are regarded as being needed in order to keep the market going.
‘It is good to see that sales have remained consistent but the drop in the number of first time buyers is still a concern. Assisting the first time buyers market is imperative if we are to strengthen the housing industry in this country. This means that the banks have to become less restrictive in their lending policies,’ said NAEA President Michael Jones.
He added that plans by the Financial Services Authority (FSA) to introduce tougher measures on mortgages are likely to serve only to restrict this part of the market further.
His warning comes as figures confirm that the number of mortgages being granted is falling. The number of loans was down 13% in August compared with July and the value down 14%, the figures from the Council of Mortgage lenders show.
The CML says that continuing tight credit conditions mean that some borrowers are unable to access new refinancing deals and there is little prospect of a significant rise in remortgaging in the coming months.
‘We expect a quiet market to continue for the foreseeable future. While we do not know what the impact of the comprehensive spending review will be on our sector, it will clearly contain austerity measures that will likely further dampen consumers’ appetite to borrow,’ said CML director general Michael Coogan.
‘We would expect lending to slow more significantly, year on year, as we head towards the end of the year, and it is unlikely that the uncertain environment will encourage a tick up of mortgage activity in 2011. With some uncertainty surrounding future house price trends, we would expect a muted market in the next few years,’ he added.