First-time buyers locked out of market boom...

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14 December 2015

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First-time buyers locked out of market boom

House purchase lending has leapt almost 20% in the past 12 months but first-time buyers remain locked out of the booming market.

There were 70,511 purchase approvals in November, up 1.3% on October and 19% on the same month last year, when there were just 59,262 approvals.

Yet first-time buyers are struggling as small deposit lending continues to stall, accounting for just 16.3% of total house purchase approvals, according to the latest Mortgage Monitor from e.surv.

Director Richard Sexton said: “More prospective homebuyers are finding their applications successful as we near winter.

“However, for first-time buyers it’s a different story. For those struggling to get their foot in the front door, Chancellor George Osborne's promises of starter homes are of little consolation.

“Theoretically, first-time buyers should be benefitting from measures such as the extended Help to Buy Scheme and the Help to Buy Isa but homeownership still remains a distant dream to many.”

The problem is the shortage of affordable homes rather than mortgage availability, Sexton said. “Supply must be addressed if aspirational homeowners are to see a real difference and only time will tell if words can translate into real benefits for first-time buyers.”