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Climbing that ladder

Catherine Deshayes

First time buyers are still keen to get on the ladder, despite falling prices...

A new survey of renters in the UK shows that over half (55 per cent) still want to buy a property despite the current downward trend in house prices, reports home move website Moveme.com.

While falling house prices are a concern to existing homeowners, the majority of first time buyers are so keen to get on the ladder that they would not be put off by the fact that their home might drop in value after they buy it.

Jonathan Turpin, Chief Executive of Moveme.com says, "Our research shows that fears of negative equity are not deterring people from wanting to buy a property.

They are being held back not by caution, but by the lack of available finance and the high deposit requirements of lenders, which are currently way out of reach for most first time buyers."

This week's announcement that the Bank of England has cut interest rates by 0.5 per cent, along with a £500 billion rescue package for the financial markets, could be the good news that first time buyers have been waiting for.

Mortgage rates are likely to fall as lenders come under pressure to pass on the saving, while the rescue package will introduce more liquidity into the mortgage markets, making it easier to borrow.

"The Government's intervention into the banking crisis this week could signify a turning point in the fortunes of the housing market. The desire to buy is undoubtedly strong, so when mortgage restrictions begin to relax we can expect to see a surge of pent up demand hitting the market," added Mr Turpin.

Source: www.moveme.com