Challenging Times for First Time Buyers

by Robin Kellock

As we enter the traditionally most popular time of the year for house hunting and selling, I am partially pleased to report that the market since my last update has continued to be very strong.

Indeed, in over 35 years working in the world of property, I can honestly say that the last year has seen the most continued period of growth that I have ever witnessed. Great news for sellers, who are getting immediate interest, with multi offers, and often selling prices at way over expectation.

All good, then? Well, partly. The seller has to buy in the same buoyant market, and the buyers who lost out must look for another house and may have to pay more and more.

A rising market will particularly hit first time buyers, who can only borrow a certain amount. Once the houses in the area that they want to buy rise above that maximum level, they have a choice to buy a little further away or wait until the market calms down—always a difficult judgment to make.

The mortgage market is certainly trying to help with more lenders entering the market with 90% and, more recently, quite competitive 95% loan to value mortgages. These will certainly help first time buyers, but the bar is high on credit score, and the income multiples remain not as generous as is needed in a fast moving market.

Once again, I am seeing a lot of first buyers, having to rely on gifted family money, rather than their income and savings. This is always worth it, for long term investment, but it does alienate the local buyers who have not got access to such funds.

It will be interesting to see how the summer progresses!!

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