According to a recent report the lack of first time buyers entering the housing market at present is resulting in problems further up the chain, with homeowners who are already in starter homes unable to sell up and move to larger properties due to lack of demand and poor house sale performance. The housing market has seen a real slump in sales figures, and many people have found that they cannot sell their homes because first time buyer numbers have dwindled.

Figures show that there were 600,000 first time buyers entering the market in 1999 at the start of the housing boom, but by last year this figures had fallen to almost half of this level. It is through that the figure will continue to fall, as first time buyers are finding it increasingly difficult to get onto the property ladder. This is partly due to the global credit crunch, which has resulted in lenders demanding higher deposits from first time buyers, which many cannot afford, as well as increased interest rates for new borrowers, tighter lending conditions, and higher arrangement fees.

Whilst many thought that falling property prices would be good news for first time buyers, who have struggled to afford a property over recent years, it has also fuelled a drop in the number of buyers entering the market. This is because further property price falls are predicted over the course of the year, and many are worried that if they purchase a property now the value will continue to fall, which will leave them in negative equity.

One CML official said that the problem is mainly due to lack of mortgages, stating: “We don’t see this as a demand-led reduction but a funding problem. At the moment it’s still seen as very much a supply-side problem.”

Recent additions:

• Much higher deposits needed by first time buyers
• Rocketing fees from mortgage lenders
• MP called consumers miserable
• House price predictions changed by Halifax
• Getting a financial adviser to help you find a mortgage

If you like this post why don't you subscribe to our feed?

Related Articles

• Seller experiencing problems with home buyers
The drop in house prices and the desperation of some homeowners to sell before prices fall any lower is resulting in many buyers getting a raw deal on the value of their home, as buyers
• More help to be offered to homeowners facing repossession
There have been some very worrying reports over recent months about the level of repossessions expected in the UK. According to recent reports the number of people facing repossession has risen by 20% in the
• House price recovery could take over seven years
A recent report has suggested that it could take seven years or longer for a recovery in house prices to be seen in the UK. Researchers have said that it could take until around 2016
• Estate agents at risk of problems due to mortgage and housing chaos
A recent report has shown that many estate agents could be at risk of going bust as a result of problems in the housing and mortgage markets, which are resulting in fewer homes being sold
• Even the government expects house prices to keep falling
Whilst the government has tried to make minimal fuss about house prices falling in the UK over the course of this year, an inadvertent blunder by the housing minister, Caroline Flint, recently dominated the headlines.