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Are poor rental standards boosting the number of first time buyers?

28-Nov-2014

There has been a rise in the number of first time buyers across the UK, according to new findings.

Research published by the Council of Mortgage Lenders (CML) revealed the number of first time buyers in Wales, Scotland and Northern Ireland has increased.

Its figures showed there were 25 per cent more first time buyers in Northern Ireland between July and September, compared to last year.

Furthermore, the analysis found that house purchase lending to home-buyers increased quarter-on-quarter in Wales totalling 7,100 loans, up three per cent compared to quarter two.

The CML said that the value of these loans totalled £870 million, a rise of nine per cent on the second quarter. 

Compared to the third quarter of 2013, the number of loans increased by 11 per cent and the value of these loans increased by 19 per cent. 

Its findings also showed the number of first time buyers in Scotland had gone up by 15 per cent.

Affordability of mortgages

Commenting on the research, Peter Hughes, chair of CML Cymru, said: "Conditions are improving for borrowers wanting to get on the housing ladder.

"Affordability is better in Wales than in the UK overall and expectations of interest rate rises have been pushed back to late 2015, which supports lending conditions for borrowers as we head into next year."

Even in the more expensive areas of the UK, such as London, the figures showed that in addition to there being an increase in the number of first time buyers purchasing homes, the value of the properties purchased has also risen.

The CML revealed there has been a six per cent rise in new buyers coming onto the London property market. Around two-thirds of those buyers purchased properties priced at more than £250,000, up from just over half compared to the same time in 2013.

In Wales on the other hand, the average loan for first time buyers went above the £100,000 mark for the first time in Wales since 2007. It now stands at £100,800.

Problems with rental properties

On the other hand, those who are renting homes are experiencing an increasing number of problems.

A report published by Citizens Advice said there has been a rise in the number of consumers complaining about damp and slow repairs in their rental properties.

The charity revealed that it has seen a 14 per cent increase in the number of people approaching them with maintenance problems.

It also claimed that one in three private rented properties in England does not meet the government’s decent home minimum standard. 

Conclusion

The reports suggest that although the number of purchasing new homes has risen, dissatisfaction with rental property has also increased. 

Although there is no hard and fast evidence linking the two, it does seem as though the poor standards of rental homes, combined with the affordability of mortgages is persuading many people to buy a property instead. Of course, further research and long term analysis will be needed to identify any consistent patterns.
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