Fri, 09 Nov 07
First time buyers are finally becoming more positive about the housing market, their confidence boosted by house price growth slowing and stable interest rates, according to Spicerhaart Financial Services’ monthly survey...
According to the survey the percentage of first time buyers has averaged an encouraging 38% in the last six months, and whilst October saw a slight drop of 2%, the proportion was still above average at 40% and higher than at the start of the year (see Graph 1).
Steve Cox, Operations Director of Spicerhaart Financial Services, comments: The proportion of first time buyers is significant and still strong. Despite some affordability constraints most still aspire to own a property and are entering the market encouraged by the held interest rates. The small drop in the group last month is attributable to a slight seasonal lull rather than buyers abandoning the property market altogether, and as such we do not expect a significant downturn.
The high six month average of 38% indicates that first time buyers remain confident and under the backdrop of stabilising house prices are looking to buy before prices start to go up again. The figures are also encouraging as these buyers are a vital driving force in the housing market and essential for a healthy mortgage industry.
Graph 1. Proportion of first time buyers since January 2007
The Spicerhaart Financial Services survey also reports a shift towards remortgaging. The monthly survey reveals an increase of over 35% since April rising to its highest level in the last four months to over 24% in October, (see Graph 2).
Steve Cox comments: The increase in borrowers choosing to remortgage their property is largely due to the tightening of the purchase market as a result of the credit crunch. Furthermore, consumers coming to the end of fixed rate deals have contributed to the shift as they look to secure competitive deals, of which there are plenty of opportunities.
Graph 2: Proportion of borrowers choosing to remortgage since March 2007
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