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Property ladder is ‘missing several rungs’

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01/05/2015
First-time buyers are increasingly struggling as the property ladder is ‘missing several rungs’, a firm in the sector has said.

Figures released today by estate agency chains Your Move and Reeds Rains show the number of first-time buyer transactions dropped to 60,900 in the three months of the year, the worst quarter for two years.

Sales in March alone were 3.7% down on the same month last year.

Adrian Gill, director of the estate agents, said that despite cheaper mortgage deals being available, there were not enough suitable properties.

“Cheaper mortgages and a steadier property market should be boosting first-time buyers,” he said.

“Enthusiasm for the idea of homeownership is as strong as ever and it’s a great time to get on the ladder according to these headline fundamentals.  Yet for many thousands of would-be new buyers there is still a very real difficulty in matching their personal finances to a home they can afford.”

The average mortgage rate paid by a first-time buyer in March was, 3.64%, the lowest recorded for four years.

At the same time the average deposit needed to purchase a home dropped under £25,000, thanks in part to the success off the government’s Help to Buy and other schemes.

However, Gill warned that the market was now at a crossroads and the supply of homes urgently needed to be increased.

“Some might also point to election uncertainty and that could be a partial brake.  However, the real bottle-neck is a much more serious and longer-term problem,” he said.

“First-time buyer numbers have flat-lined for two years because a lack of new homes is catching up with the property market.  It’s not the election itself that matters most – it’s the next five years and the decades after that which will count

“Even now, with the extra support of record low mortgage rates and Help to Buy, the property ladder seems to be missing several rungs. Politicians need to get serious about building more homes.”

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