Friday, Apr 09, 2010
Number of first time buyers falls sharply
Yahoo: Number of first time buyers falls sharply
The proportion of people who plan to buy a property who are first-time buyers has dropped for the second consecutive quarter to 25.8pc, according to property website Rightmove (LSE: RMV.L - news) .
The group warned that the figure was well down on the 40pc of housing transactions that would usually be carried out by people buying their first home in a healthy market.
Posted by mark @ 11:44 AM (2712 views) Add Comment
23 Comments
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1. mrflibble said...
My only surprise here is that 1 in 4 buyers are going to be FTB's. Given the huge deposits required, the squeaky clean credit history to get a high(ish) LTV deal, and the fact prices are still at 6x income, then I'm surprised the figure isn't more closer to 1 in 10.
Fear is the only thing keeping FTB's in the current market and when it all goes South these people will be the hardest hit. They will have stretched the hardest, paid the highest and have the thinnest cash reserve of all.
We are indeed the country that eats its young...
2. 51ck-6-51x said...
There is a big difference between stating in a survey that you "plan to buy a house in the next 12 months" and actually doing so. Where are the realised data?
3. 51ck-6-51x said...
mrfibble said, "Fear is the only thing keeping FTB's in the current market and when it all goes South these people will be the hardest hit"
- I would be inclined to agree, just look at London, both the highest prices and the least damaged since the peak, yet the greatest proportion of potential buyers that are would-be FTBs.
4. mark wadsworth said...
@ Mr Flib "We are indeed a country that eats its young", Home-Owner-Ism is all about redistribution from bottom to top and from future to present.
The banks inflate prices to increase interest income from borrowers; the bankers then rob the bank's shareholders; the landlords live off the tenants; the government buys votes with Fool's Gold; the landowners milk off the productive economy (indirectly, or even directly via agricultural land subsidies); the middle aged live off the young (no offence to Mr G - I'm distinctly middle aged and guilty as charged); and current spending is funded out of future debts.
It seems like a daft system to me, but that's what we keep voting for.
5. mrflibble said...
@ 4. mark wadsworth...
I agree with what you say. What we seem to have is a system based around sucking in an endless supply of greater fools and mortgaging off tomorrow. It has worked up until now and I'm sure Brown and even Cameron want it to continue. The trouble is, out in the real world the real money seems to be gravitating towards countries that have real things to offer. I wonder where the UK sits in all of this, having exported our manufacturing and become accustomed to simple flipping financials for ever increasing profits, what do we really have to offer the world? Over the last few months I've started to realise why Merv wants a weaker pound. The UK needs to rebuild and Merv is sowing the seeds for this. The trouble is the Sheeple, fed on bullsh-t and lies, seem to think it is still boom time and we can simple flip houses to get by. It's going to be hard to convince the youngest generation of society that they need to bust their hump and see nothing in return. When their efforts cannot even buy then a 2-up 2-down in the worst part of town they may start to question why they bother.
6. doomwatch said...
flibble. I know this is going to sound anti HPC, and trust me, I'm an HCP stalwart, but I think this may be a good time to jump in, given
the fact that if you get a good 5/10 yr fixed rate (low LTV), and nototiate down (not hard), it could be a good move, as the coming IR hike, will kill any chance of buying, even if capital drops 10%. e.g better to buy a 200k property at 5% than a 180k at 7+% ? The maths answers the question.
7. timmy t said...
doomwatch, whilst you're right that the maths stacks up, for me the flaw in your theory lies in prices only dropping 10% with a rise in interest rates. I think we will be closer to 40% than 10%.
8. mrflibble said...
@ 6. doomwatch...
If IR's are going up then you would be better off renting as returns on cash would increase vs. rent. Any increase in IR's will cause property prices to go down, which cannot be allowed. We have a zombie economy that cannot survive on high IR's.
My personal feeling is that we will try keep IR's artificially low and neither ownership or renting will be hugely profitable for a long time to come - take your pick. Any money we earn is likely to be poured down the drain (directly or indirectly) so the older generation can keep hold of the ill-gotten gains they made from owning a pile of bricks.
9. inbreda said...
my concern is that the government will engineer the public owned banks to lend cheaper money and the lack-of-FTB slack will be taken up by greedy BTLers
10. 51ck-6-51x said...
inbreda - in that case we all buy and let to each other ok?
11. inbreda said...
you wont want to when you see what I plan charging you in rent!!
"It seems like a daft system to me, but that's what we keep voting for." ... someone posted a quote on this site once that read something along the lines of "democracy only works up to the point that the populous realsie that they can vote for the person that promises them the most money, and the politicians realise they can line their own pockets by promising the most to the majority.
scarily it makes me feel like democracy in the uk is about to end
12. 51ck-6-51x said...
In the words of David Friedman,
"""
Special interest politics is a simple game. A hundred people sit in a circle, each with his pocket full of pennies. A politician walks around the outside of the circle, taking a penny from each person. No one minds; who cares about a penny? When he has gotten all the way around the circle, the politician throws fifty cents down in front of one person, who is overjoyed at the unexpected windfall. The process is repeated, ending with a different person. After a hundred rounds everyone is a hundred cents poorer, fifty cents richer*, and happy**.
"""
* except the politician who skimmed of £50.
** I'm not so sure all are happy!
13. Property Babe said...
First Time Buyers are no longer 'the lifeblood of the market'. Property developers and landlords are the market makers. You can whinge about it and pontificate about how the would be a better place if you were in charge but in the end you will just have to get used to it.
14. smugdog said...
Timmy T @ 7. Seriously, I feel for you.
If 40% regions are still in your head,
then you seriously need to make some space
between you and the "Waco" cult that is HPC.
(Or abstain from the Wife Beater for a period).
15. wdbeast said...
Hi smugdog, why do you think 40% drops are not realistic?
16. Space said...
40% in some regions is realistic, Timmy T please marry smuggy and I'll provide limitless amounts of stella.
17. alan_540 said...
Naughty doggy, down boy!
18. markj69 str05 said...
@ smugdog... You should know by now that the markets are totally unpredictable. Especially when so many external influences are affecting their natural behaviour. 40% drop is not out of the question, as is a continual rise, such as in 2009.
The General election has a part to play there IMO.
Personally, I am extremely bearish about the coming years. I'm not sure the markets will behave normally for some time. Too much damage has been done. Too much at stake to let it crash (Or so some may think - Those capable of influencing the markets - At teh moment!).
And I must say, you comments regarding 'wife beater' seem to be becoming a frequent feature of your posts. Personal experience perhaps?
19. novice pete said...
I think this is where smugdog resides during the day.
20. Biscuitbum said...
Any IR rise will be death to FTB`s, and while most people believe that rates won`t rise this year, Cameron is is already under pressure from his mates in the city to hike them up asap, and I don`t believe there will be a house price crash as some believe, and many want. It is possible that a lot of the slack will be taken up with BTL. It certainly makes sense for Britain to become a mainly rental housing economy, but I worry about the growth of the large rented property companies.
21. Sherman Unkefer said...
Why did violent crime and gun related crime in the US start falling so sharply after 1993?
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