First_Time Buyer Numbers Drop

First-time buyer numbers are at their lowest level in 20 years according to Halifax.  The number for first-time buyers is at its lowest level in more than two decades.  In 2007 an estimated 300,000 first-time buyers entered the market which is 44 per cent less than in 2002.

Halifax has calculated that a typical first-time buyer was unable to purchase the average house price in 96 per cent of towns in 2007.

In addition, according to data published by the Council of Mortgage Lenders (CML), a first-time buyer pays out a massive 20.7 per cent of their income on mortgage interest payments in December 2007, compared with 17.9 per cent in the same month in 2006, with the average income multiple for a first-time buyer increasing to 3.38 compared with 3.34 in 2006.

Our view

The first-time buyer burden may be reduced as interest rates have been cut twice since December to ease the debt burden for home owners and the first-time buyer during 2008.  We also expect a further cut towards the summer, which again may stimulate the first-time buyer market.

Useful links:

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