How the Express get away with this I do not know. They’ve given up on Princess Diana stories but have wheeled out the property VI stuff again. But their whole article seems to be based on the ‘estimates’ of one estate agency (Winkworths) of 80 branches, which says that first time buyer activity has increased from 19% to 35%. But it does not state if these potential buyers are dreamers or really in a position to buy.

They are saying that first time buyer (FTB) activity is rising so are hinting that people should now seriously start thinking about buying before prices go up again. Painting a picture of FTBers ‘flocking’ to estate agents with hefty deposits and armed with agreements in principle from lenders can do nothing other than suck more people into ownership when, perhaps, the time isn’t actually right for them.

Nicholas Leeming of Zoopla said that FTB affordability is at 2001 levels. I would love to see some figures to support this. It may look the same if, for example, you look at the Nationwide house price graphs. But the definition of ‘affordability’ is vastly different to a lender today than that of 2001. Lenders’ mortgage criteria is much tighter today and the demise of the ‘Self-Cert’ mortgage will keep the number of prospective buyers down. As will potentially rising unemployment. There is also no national shortage of mortgage advisers, most are still struggling.

While I agree there is FTB pent up demand, there is a big difference between those that want and can compared to those that want but can’t. I suspect the latter far outweigh the former.

Deposits are also harder to amass what with lower savings rates. This will get worse in future as tax rates rise. Investment in the near to medium future may well not perform as they have in the past.

There are also claims that the cost of moving has reduced, well you would expect that to happen in a recession, but at the first whiff of a recovery those prices will rise again. Rosemary Rogers of may welcome the return of the FTB, but I wonder how much her profits have increased due to this 'release' of pent up demand.

Until ‘affordability’ means a maximum of 10% deposit and 3 times single annual wage prices will slide. But government actions such as QE will ensure this takes far far longer than it should.

We also do not need to encourage people to effectively inflate another housing bubble. Look what happened last time.

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