First-time buyer 'black spots' rise in the UK

 

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The Independent Online

The number of first-time buyers in the UK has tumbled over the past two years, resulting in seven out of 11 regions become "black spots" for the market.

The level of buyers in the majority of the country made up just 20 per cent of the total transactions in July, half the level for a "healthy and functioning property market" according to Rightmove's latest survey.

The levels of first-time buyers across the UK has dropped from 30.8 per cent in July 2009, to just 23 per cent last month. The lowest region for first-time buyers was Scotland at just 16.8 per cent closely followed by the South-west and Wales at 17.6 per cent.

The others regions falling into what the company called the "first-time buyer black spot" level of less than 20 per cent, comprise East Anglia, East Midlands, the South-east, and Yorkshire and Humber.

Miles Shipside, director of Rightmove, said: "First-time buyers perform an essential function at the start of the housing ladder by beginning chains that help others in the area to move as well. The emergence of so many first-time buyer black spots has serious implications not just for those who are unable to buy for the first time, but also local housing markets in each of those regions. It is particularly bad news for first-time sellers."

The national average was skewed by strong levels in London, the only region that fits the "model of pre-credit crunch norms", the report said. It found that 41.2 per cent of those who intend to buy in the capital will do so for the first time.

This comes, as Rightmove points out, despite lenders increasingly pushing their focus on to first-time buyers. The number of mortgage products has increased from 13 two years ago to 138 currently on offer. The research found that issues holding first-time buyers back include the difficulties in raising a deposit, concerns over meeting monthly mortgage repayments and a belief that properties may be overvalued.

Mr Shipside added: "It's tough for first-time buyers to save for a deposit in the face of the rising costs of living. Even though the number of available mortgage products for this buyer group has improved, it appears that deposit requirements are still proving a major hurdle."

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