More First-Time Buyers Driving up High-End Property Sector
As the Telegraph recently reports of a ‘five year high’ in asking prices on UK property, the steady recovery of the market seems upon us. Mortgage lending schemes are enabling more young people to buy for the first time, sending positive ripples right up to the upper tier of the market.
It is unlikely to come as a surprise to anyone that Rightmove says it had found that 7 out of 10 people who plan to sell in 2013 will be aged over 45, suggesting that older people are likely to be driving the property market in the coming months.
Selling in order to downsize now the kids have flown the nest, or using the equity to move to a nicer house in a hot retirement spot, whatever the reason, it is this category of buyer that everyone’s hopes are pinned on as the main “movers and shakers” in 2013.
But renewed momentum from first time buyers and its impact on the housing market should not be overlooked. The Council of Mortgage Lenders (CML) recently reported that lending to first-time buyers reached a five-year high in 2012. A significant step compared to 2008, when the CML reported their lowest quarterly figures for first-time buyers since 1974.
Over the last 12 months, better funding conditions and the success of initiatives like NewBuy and the £80 billion Funding for Lending Scheme have made overall lending conditions more competitive, accessible and affordable.
Industry experts, like Property Wire, have been buzzing from the new high in mortgage approvals, up 17% last month making it the best month since the 2008 financial crisis. Falling rates and a wider range of mortgages available have begun to work their magic.
Simon Bradbury, Senior Partner of Fine & Country Cambridgeshire said, “I am delighted by the recent increase in focus on FTBs which surely can only have a positive impact on the middle and upper sectors of the housing market.
Already in the last month or so I have experienced a dramatic decrease in the length of time it is taking to sell a property in St Neots with a couple of extreme examples of houses receiving acceptable offers in less than 48 hours of them going on to the market. If just feels like we are turning a corner at the moment.”
New mortgage offers from banks and Building Societies have started to fill the cracks in the lending market.
In response to concerns that the average unassisted first-time buyer is 35, Barclays launched its “family springboard mortgage” knowing that family members are playing a larger role than ever before in helping their kids. The deal allows the homebuyer to borrow 95% of the value of a property providing a “helper” (such as a parent) puts a further 10% into a special savings account.
The helper will receive interest and will be able to withdraw it after 3 years providing mortgage payments have been kept up to date.
When asked his thoughts on these new deals Simon comments, “it is interesting to see the innovation in mortgage products to help buyers get on to the property ladder. This gives today’s borrowers the power of choice, which is fantastic. I predict this optimism to permeate right the way through to the mid and high end sectors, helping older buyers out there too.”
“The changing lending landscape”, he continues, “means confidence is rising, supporting an increase in transactions. Everything points to 2013 being a great year for property sales.”
Fine & Country specialise in selling luxury homes (above £450,000) and is one of the leaders in this sector. Its licensees’ properties are distinguished in their individual character and/or their country location. The company has offices in 300 locations around the world including in the UK, Dubai, Egypt, France, Malta, Mauritius, Namibia, Portugal, Qatar, Spain, South Africa and West Africa. Fine & Country won Best Estate Agency Marketing and Best International Estate Agency Marketing in 2009, 2010, 2011 and 2012 at the International Property Awards.