First-time buyers 'shape the mortgage market'

Date:Tuesday 2nd March 2010
Author: Susanna Kavka

The mortgage pattern of first-time buyers is the best barometer of what is happening in the mortgage market as a whole, according to the Council of Mortgage Lenders (CML).

Head of research at the CML Bob Pannell looked specifically at first-time buyers and found that their purchasing had changed in recent years, especially where deposits are concerned.

Today's consumers who are looking to get on the property ladder have a deposit of around £34,000, a sum which is more than the average annual household income.

Compared to three years ago, the sum was just £12,700 and a more manageable 37 per cent of yearly earnings.

As a result, this has created "extraordinary changes in the ability of first-time buyers to enter the market".

However, a tightening in the marketplace has been happening for some years, including a general consensus across all age groups that it was becoming harder to obtain a first mortgage and a fall in the number of people under 30 who had mortgages.

This news is backed up by the report by the CML that gross mortgage lending fell in January by 32 per cent compared to the previous month.