First time buyer mortgages and property sales plunge simultaneously

Posted: 24/05/2012

According to the April Mortgage Monitor from e.surv charted surveyors, mortgage approvals fell to their lowest level in nine months for first time buyers.

Loans for properties up to £125,000, typically a price paid by a first time buyer, fell 5% lower than in March and 1.2% lower than April 2011. This could be because the banks are tightening their credit conditions.

However, approvals in all price brackets over 350,000 increased. The average deposit on a house purchase loan rose above 40% for the first time since the beginning of last year.

A total of 72,000 homes across the UK were sold in April, less than March but more than the 70,000 properties sold in April 2011, when the Royal Wedding disrupted the housing market.

The figures from April equate to 2,400 properties sold every day, which is less than the long term average of 3,383, according to housing analyst Henry Pryor. He estimates that properties have only an 8% chance of being sold in the next month and a 34% chance of being sold in the next year.

Home owner occupation has been declining since 2005 after reaching a peak of 70.9%. The current rate of people living in their own home is around 66% with 17.5% living in council housing or housing association homes.

But if you’re looking for a more affordable home, studies have revealed that properties are 37% cheaper when sold in an auction. Figures showed that 1,479 properties were sold in April at an average price of £101,060 compared to the average house price in England and Wales of £160,372.

However, the value of homes going under the hammer is rising, but there are still considerably savings to be made.

Unfortunately, the latest figures from the European Union have revealed that property taxes are the highest in the UK compared to the rest of Europe.

The data was released from 2010 and showed that property tax was at 4.2% compared to France at 3.4% and the Czech Republic at only 0.4%. Although transaction taxes such as Stamp Duty were the highest in Belgium at 1.8%, Italy at 1.3% and Spain at 1.2%.

What do you make of the latest property market figures?

Amanda McGovern, Pali Ltd

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(0) Comments mortgage, first time buyers, auction, tax

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