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Don’t consider FTB crisis in a vacuum

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PAUL BROADHEAD, HEAD OF MORTGAGE POLICY, BUILDING SOCIETIES ASSOCIATION

It’s been a busy few weeks in the world of mortgages. I seem to be spending much of my time in summits, be it self-build or first-time buyers, or being interviewed about them.

One such event that has been on my mind of late is the Grant Shapps-led group on first-time buyers. Everyone knows it is difficult for first-timers to get on the property ladder and most people know a 30-something still living with their parents because they can’t afford to buy a home.

When Shapps mentioned that the average age of an unassisted first-time buyer has reached 37, it led me to wonder two things – what were they doing 10 years ago when they were 27 and finance was freely available and what can the lending community do to help them?

By looking at first-time buyers in a vacuum, we miss seeing the scale of the challenge.

It is difficult to create incentives solely aimed at first-timers if there is nowhere for them to move, either because insufficient properties are being built or those occupying the first rung of the ladder can’t move on and vacate properties.

Demand from first-time buyers has also taken a knock. If they are concerned about job security or are nervous about the economy, they are naturally nervous about making the biggest purchase of their life so far.

Until we see regulatory certainty and funding lines returning to something resembling normality, the market will continue to remain dysfunctional, with lower levels of net lending.

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