First-Timers Boost Housing Market

Tuesday, 28 May 2013

The housing market bounced along with a spring in its step in March this year, experiencing a boost in sales worth £2.4bn, thanks to a jump in the number of first-time buyers.

Figures from the Council of Mortgage Lenders showed a 20% increase in lending to new buyers and seem to hint that a range of government funded schemes are starting to make an impact.

Any positive news in the housing market is welcomed, especially by those employed in the industry, keen for concrete evidence of a recovery. A total of 19,100 loans were paid out to first-time buyers in March - up from 15,900 in the previous month.

One of the biggest problems for first-time buyers is finding a deposit. With the days of very high loan-to-value loans a distant memory, most first-time buyers need to find a deposit of 20%, which on average is still a down payment of over £30,000 – quite a lot to ask from your typical first timer.

Schemes such as NewBuy, FirstBuy and Help to Buy are the government’s attempt to assist with this problem, either by providing a government backed equity loan or a guarantee.
Critics of these schemes claim that young people are simply taking on more debt and the government is artificially inflating the housing market by putting taxpayers’ money behind loans that traditional lenders aren’t prepared to match.

But these doubts don’t seem to have dampened the enthusiasm of first-time buyers, who are making the most of the help at hand. First-timers accounted for nearly half of all mortgages approved in March, and homeowners elsewhere in the market will hope to feel the knock-on benefit throughout the year.

Once the mortgage has been agreed and the contracts signed, comes the fun bit of decorating and furnishing a new home. First-time buyers should remember to protect their building and contents by taking out home insurance for their lovely new place.

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