THE PROP­ERTY EX­PERT

Harefield Gazette - - PROPERTY -

De­spite the slight chill in the air with the rate of growth in proper ty val­ues over the last three months (most no­tice­able in the over­heated south­east) first-time buy­ers made it hot and sunny by con­tin­u­ing to pile into the proper ty mar­ket, at what could be the top of re­cent price surges.

The most re­cent fig­ures from the Coun­cil of Mor tgage Lend­ing (CML) re­vealed that lend­ing to first-time buy­ers hit record lev­els; a seven-year high in fact.The num­ber of loans was the high­est since De­cem­ber 2007 at 28,600 - an in­crease of 7.1% since May and 18.7% since June 2013.The amount bor­rowed is also at lev­els not seen since Septem­ber 2007, at £4.2bn for the month, a sig­nif­i­cant in­crease from May at £3.8bn and since June last year at £3.3bn.

The sim­ple wish to own their own home clearly seems to be what is spurring them on to de­ter­minedly chal­lenge high house prices and the loom­ing in­ter­est rate rises.This has been as­sisted by the rel­a­tively low level of in­ter­est rates, which saw pay­ments re­main ‘man­age­able’ in June at 19.3% of gross in­come spent in ser vic­ing cap­i­tal and in­ter­est rate pay­ments, slightly down from 19.5% due to ris­ing wages. On the swings side the av­er­age age of first-time buy­ers also fell from 30 to 29 in June and the av­er­age house­hold in­come rose from £36,700 from £35,700. But, on the round­abouts side, due to the ex­cep­tional house price hikes over the last year, the av­er­age de­posit for first-time buy­ers rose to £30,966 in June, com­pared to £29,250 a year ago.

“More peo­ple are bor­row­ing larger amounts,” said So­phie Chick, an­a­lyst at Sav­ills. “I be­lieve it [the rise of first-time buy­ers en­ter­ing the mar­ket] is par tly to do with pent up de­mand from the down­turn and also that the de­sire to own a home is still sky high.”

How­ever - and this is not in­tended to fore­cast rain clouds de­vel­op­ing in the cur­rent blue skies - the Bank of Eng­land’s new con­trol mea­sures came into ef­fect at the end of June, which made it harder to bor­row a high loan to in­come mor tgage, and this may or may not, ac­cord­ing to which source you read, lead to a re­duc­tion in bor­row­ing and im­pact on the num­ber of first-time buy­ers – but as the fig­ures will not be avail­able for a while it is prob­a­bly as dif­fi­cult to pre­dict as ac­cu­rately as the weather!

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