Comments on situation for first-time buyers

Date:Thursday 26th February 2009
Author: Susanna Kavka

First-time buyers are being given opinions about the state of the mortgage market for them.

Nationwide has said that affordability is improving for new buyers as well as existing ones, pointing out dropping rates that are bringing down the cost of variable-rate mortgages.

Chief economist at Nationwide Fionnuala Earley said that house prices dropped by 1.8 per cent in February and added that falls in interest rates had also improved affordability.

She did note, though, that despite enquiries from new buyers, this has not yet translated into sales from them.

Meanwhile, Moneyfacts has said that high rates are providing a disincentive for first-time buyers.

The financial information source said that first-time buyers are having to pay roughly three per cent above the base rate.

Analyst Michelle Slade said that before the recession, there was a lot of competition in the market, offering good deals for people with small deposits.