Mis-sold Mortgage Claims > Mortgage News
First-time buyers remain constant as mortgages continues to be subdued
Thu, 07 Apr 2011
It has been reported that first-time borrowers (FTB’s) although well below historic levels of lending, represent a consistent share of the overall mortgage market at around 37 per cent of all purchases. As reports continue to be released showing a "subdued" mortgage market experts have expressed the need to ensure that FTB's are supported and criticise some recent measure to do this as insufficient.

FTB’s have continued to face problems as they are younger and the employment market for them has been difficult. Chief Economist at Nationwide, Robert Gardiner has drawn attention to the fact that 18 to 24 year olds account for 20 per cent of FTB’s and that the unemployment in this group has increased by over 6 per cent whilst graduates face double the rate to 20 per cent. These increases are compared to 2007 statistics.

Recent figures released showed that deposits found by FTB’s had increased to 23 per cent from 20 per cent. The Council of Mortgage Lenders (CML) statistics show that a typical mortgage repayment for FTB’s represents 30 per cent of their disposable income despite low interest rates . This clearly demonstrates the negative impact that any interest rate rise may have on this sector.

Robert Gardener states, "I believe the number of first-time borrowers is likely to increase substantially when the job market strengthens. With the economic recovery set to remain modest, first-time buyers will be slow to return, further reinforcing our view that the hosing market will remain sluggish through 2011."
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