First-time buyers caught in holding pattern
Times are harder than ever for first-time buyers trying to get a foothold on the property ladder. Given the slowdown in the housing market and the tightening of lending criteria by banks and building societies, FTB’s are choosing to wait and see how the uncertainties of the market play out.
[UKPRwire, Mon Mar 10 2008] Times are harder than ever for first-time buyers trying to get a foothold on the property ladder. Given the slowdown in the housing market and the tightening of lending criteria by banks and building societies, FTB’s are choosing to wait and see how the uncertainties of the market play out. Their difficulties are further exacerbated by the overall economic climate, with rising living costs putting additional strain on household finances.
The volume of prospective house buyers fell 64% between January and February, according to figures from Abbey Mortgages. At the beginning of this period, some 14% of prospective buyers were considering a purchase, but only two months later this figure has decreased to only 5%.
The New Homes Marketing Board (NHMB), set up to promote the benefits of new homes to consumers, is urgently calling on the government to include incentives for first-time buyers in the March budget. The main such incentive is to scrap stamp duty (an obligatory tax paid by the buyer of a property, calculated as a percentage of a property’s value) for FTBs.
The NHMB chairman David Pretty said, “The current stamp duty regime now represents an unfair tax on young buyers who can least afford it”, and that the potential price benefits of the current market slowdown – which normally might ease the situation for FTBs – could end up being largely cancelled out by the recent tightening of lending criteria by lenders who consider FTBs a high risk group.
Lawrence Smith of Decision Homebuyers concurred with this view, saying that “any measures that can be taken to ease the way for first-time buyers would give a much-needed boost both to them and the struggling housing market”.
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