First-time buyers are the life blood of the mortgage market. They act as the initial rungs of the housing ladder, the point where people get on and provide the start of the food-chain that enables others to move house, remortgage and scale up.

 

Lots of mixed metaphores there I know, but without the influx of first-time buyers the housing market is just going to stagnate. The first time buyers of last year or the year before, who now want to upgrade to a bigger, more expensive property, just cannot find anyone to buy their houses because mortgage companies are now insisting on deposits of 15 per cent or higher. This situation is simply untenable for most first-time buyers, especially at the moment after a period of high inflation followed now by the uncertainty of recession and the threat of job losses.

 

So mortgages are virtually impossible to come by for first-time buyers, the housing market stagnates and all the other people looking to move house simply cannot, leading to even fewer mortgages sold. Not a happy time for anyone involved in the housing or mortgage industries.

 

The knock-on effect is not only impacting mortgage providers. Home builders who, in the past, would have built a significant percentage of their development portfolios for first-time buyers are effectively snookerd. They can't raise credit to build new homes, their potential customer base is severly eroded and of course house prices are falling rapidly. Simply no-where to turn to.