ROOF Blog

Buy-to-let investors will not be able to cope with demand unless they are able to access government support, the Intermediary Mortgage Lenders Association (IMLA) has said. After surveying 506 mortgage brokers, the IMLA found that 80 per cent of first-time buyers were unable to secure a mortgage and were choosing to rent instead. It argues that the government should support buy-to-let lenders so the rental market can make up for the ‘downward trend’ in home ownership.

House price falls have made it cheaper for first-time buyers with deposits of upwards of £25,000 to buy a home than rent one on most parts of the UK. According to research by Abbey National, London and East Anglia are the only regions where renting is cheaper than buying for people with a 25 per cent deposit. The North offers the biggest savings to buyers, followed by Wales. However, with a 15 per cent deposit, renting a home is cheaper than buying one throughout all regions of the UK.

Estate agents have reported a slight increase in activity at the end of 2008, the National Association of Estate Agents said in its monthly survey. Agents said the number of house hunters registered with agents rose from November to December, as did the average number of properties available for sale. The number of sales per agent remained at six, an historically low number, however, the percentage of first-time buyers rose for the fifth month in a row.

Falling house prices have made it the easiest for five years for those at the very bottom of the property ladder to trade up. However, because prices for larger properties have held their value better it has become harder for families in middle-sized homes to move into bigger properties. The difference in price between an average one- and two-bedroom property is £31,000, £10,500 less than a year ago and the lowest difference in five years. The difference in price between a two- and a three-bedroom home has also fallen – down from £66,264 to £58,436.

Housing affordability in the UK ‘improved significantly’ in 2008 because of falls in property prices the Halifax has said. The house price to earning ratio dropped to 4.56 in November, following house price falls of more than 16 per cent in the previous 12 months. The ratio is at its lowest level for more than five years, and well down on its peak of 5.84 in July 2007. Despite the house price falls seen during the past 18 months, there was no increase in the number of areas that were affordable in London, the South West, West Midlands, Wales and Northern Ireland. However, for first-time buyers, the number of regions where housing became more affordable tripled, with Scotland seeing the biggest rise in affordability, with 67 per cent of local authorities now affordable for a single first-time buyer.

The proportion of first-time buyers entering the housing market increased for the third month in a row in November, according to the National Association of Estate Agents (NAEA). Figures indicate that 10.4 per cent of all properties sold during the month were bought by first-time buyers, up from 8.3 per cent in August. The NAEA said that traditionally this time of year shows a seasonal downturn in numbers entering the market, which means the full impact of recent interest rate cuts and government announcements helping homeowners would not be felt until next year.

Housing minister Margaret Beckett announced the government has promised an extra £100 million to help first-time buyers get on the property ladder. Mrs Beckett, determined to provide ‘real help’ for families in the current difficult economic climate, increased the amount available by £100 million, to give households with incomes below £60,000 the chance to buy a new home with the help of a shared equity loan which is free of charge of five years. More than 130 developers have agreed to take part, and it is hoped that 18,000 first-time buyers will benefit. Opponents have accused the government of being irresponsible and first-time buyers of being ‘bribed’.