08 Apr 2005 News Item
First-Time Buyers remain despondent about their chances of getting on the property ladder this year...
Abbey's quarterly first-time buyers report shows that in the three month period since their last survey, the number who believe they'll actually own their first home this year has fallen from 18 per cent to just five per cent.
Of the would-be buyers surveyed, 37 per cent say that there are just not enough properties on the market. Twenty-nine percent are playing the waiting game, although this figure has dropped from 42 per cent three months ago; with some recent reports of moderate price rises, it seems that many first-timers have accepted that the market is not about to crash.
The Chancellor's decision to raise the stamp-duty threshold to £120,000 may see a more positive outlook for first-time buyers' confidence levels in the next quarterly report, says Abbey.
However, that increase will assist buyers outside of London and the South of England more than those living in these regions, where the vast majority of properties are above the new-improved stamp duty threshold.
Make Me An OfferFaced with that reality, many first-time buyers are becoming more adept in the art of negotiating. Forty-five per cent think that the time is right to do this, while it's still considered a buyers' market, and of that number, 77 per cent say they'd be prepared to put in an offer at the outset.
Fifteen per cent are willing to resort to gazundering (putting in a lower offer very late in the buying process), though 43 per cent of wannabe buyers wouldn't offer under the asking price for fear of missing out on the property.
A morally upright 12 per cent, meanwhile, just think it's wrong to gazunder. Mind you, one in ten didn't even know that offering less was an option, which makes you wonder how they'll cope with the financial responsibility of owning a home!
Eager to maximise their value for money and keen to avoid extra expenses once having procured a property, first-time buyers are very likely to ask for certain things to be included in the price. 59 per cent would want to have lights included, 54 per cent curtains/blinds, 50 per cent a cooker, 35 per cent a dishwasher, 34 per cent a washing machine and 33 per cent a fridge freezer.
Pay More, Share Or Buy a Houseboat?But despite this desire to cut costs, those who can buy seem willing to pay more. Compared with Abbey's last first-time buyers report in January 2005, the amount people are willing to pay for their first home has increased. Fourteen per cent say they are willing to pay over £250,000 compared to three per cent in January.
Eighteen per cent of buyers aim to spend up to £100,000 on their house, 17 per cent between £100,000 - £125,000, 15 per cent between £126,000 - £150,000, 11 per cent between £151,000 - £175,000, nine per cent between £176,00 - £200,000 and seven percent would pay between £ 201,000 - £250,000.
How are they managing to find the money? Fifty-four per cent save for their own deposit, three per cent will receive a helping hand from their family and eight per cent opt for a 100 per cent mortgage, says the report. Of those saving for their deposit, 25 per cent aim to have at least ten per cent to put down on their desired property, and an impressive 28 per cent say they would save 20 per cent or more. This figure has increased from 12 per cent in January to 28 per cent in March.
Those with generous relatives seem to have given up on owning a property of their own: Abbey's figures show that 21 per cent would consider buying through a housing association or with friends/family. Twenty-three per cent would purchase a wreck as a cheaper method of getting a foot on the ladder, and five per cent say they would abandon the notion of bricks and mortar to own their own houseboat or caravan.
Abbey's Chief Economist, Barry Naisbitt, said: "In the lead-up to the most popular season for house buying, it's worrying that there has been such a drop in confidence.
"Our report shows just how tough it is to get on to the property ladder, but we hope that the recent increase in the stamp duty threshold will have a positive effect on first-time buyers' confidence and affordability over the next quarter."