Better Loan Deals Increase First Time Buyer Confidence
It is often said that first time buyers are the most important sector of the housing and home owner loan markets and if they return to the market, buying property and applying for new loans, the long awaited recovery in the housing market will spread to the rest of the market.
A new survey conducted by the credit referencing agency Equifax has shown that confidence is returning to the first time buyer market, as a growing number are slowly starting to make offers on houses and apply for new home owner loans.
The survey found that around 70 per cent of those first time buyers who were interviewed felt more confident about entering the property market, due to the currently lower house prices along with the increased availability of cheap loan and mortgage products from banks and building societies, in addition to slightly increased loan to value ratios.
Despite this increase in confidence, more than two thirds of first time buyers claimed that they still found it difficult to be accepted for the loan they required, with the main reason given being insufficient deposit to meet lenders strict loan to value criteria.
Many potential first time buyers are still unable to get onto the housing market due to a lack of deposit and another 30 per cent said that they were rejected for a home owner loan due to an adverse credit history through defaults and arrears on previous loans, whilst 17 per cent said they were rejected for not having any credit history at all.
Neil Munroe at Equifax commented on the figures, he said “Clearly the challenging financial conditions are still making it hard for first time buyers to get on the property ladder. But what our latest research, conducted in early October, shows is that there is a new level of confidence that probably hasn’t existed for the last twelve months or so.”
