First-time buyer business in decline
Daniel Clayden, director of Clayden Associates, told Mortgage Introducer the majority of his business recently had been on the remortgage side with almost no FTB business written since the turn of the year.
He said: “In my experience, the FTB boom at the tail end of last year has not continued and most of my business so far this year has been remortgaging.”
The picture being painted by intermediaries is in marked contrast to the hope at the end of 2005, where FTB levels were showing signs of recovery.
Mike Fitzgerald, sales director at Brentchase Financial Services, commented: “We’ve done a lot of new purchases for second-time buyers recently, but in the last three or four weeks, our FTB business has really declined.”
Both Clayden and Fitzgerald cited increasing house prices as a factor for the drop in FTB business.
Clayden said: “House prices are too expensive and FTB incomes are not high enough to get onto the property ladder. We need a long period of limited growth in the market to allow wages to catch up with prices.”
However, Fitzgerald also added: “There might be a certain reluctance to jump into the market right now as they are unsure which way the market might go, especially with the Home Information Packs (HIPs) situation. Although, there’s not one specific reason.”
Jim Gillespie, principal of Independent Financial Services, believed geography was relevant.
“I am based in the North East and having the cheapest house prices in England and Wales means we have no problems with FTBs. There are still plenty of houses available for around £60,000 so there are no problems finding a property. We are doing as much FTB business as ever.”