Toughest time in 30 years

First time buyers are facing the toughest market conditions in 30 years, according to statistics from the Council of Mortgage Lenders. Not since records began in 1978 have such low numbers of first time buyers successfully got onto the housing ladder.

Whilst house purchasing has hit a record low in August - with figures at just over 42,000, a 42% drop since the previous August - it is first time buyers who are particularly hit by market conditions.

House prices may have fallen, and be still falling, but many are unable to take advantage of the new lower prices as so few home loan products are available and lenders are demanding increasing amounts on deposit.

It is not even two years since lenders were offering loans at 125% ltv, or allowing borrowers large multiples of their income. Since early this year the percentage of asking price required by mortgage lenders has steadily grown from 10% to 16% and increasing.

Whilst the Bank of England has been steadily pumping capital into the ailing banking system, liquidity has yet to be restored to the market, meaning that lending in many areas has been effectively stalled or frozen.

With house prices still reckoned to be overvalued and unemployment and recession fears rocking the country, it is not surprising that fewer houses are being put on the market. Few borrowers are willing to risk their savigns on buying a house when prices are still on track to fall at least a further 10% in the coming year. And that’s supposing that they can find an affordable loan.