Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“House prices have experienced a slight slowdown in recent months, with seasonal variations as well as tighter mortgage regulation reining in property prices. However, average prices are still well up on last year, with the UK as a whole experiencing double digit growth. The ONS data also suggests the property market recovery is no longer London-centric, with regions across the country experiencing a noticeable uplift in prices. While house price growth is good news for existing homeowners, who will benefit from capital growth and the freedom to unlock more affordable mortgage deals, this may not come as much comfort for first-time buyers, particularly as they are facing prices that are 12% higher than a year ago. However, financial assistance schemes such as Help to Buy have gone a long way in making mortgage finance more accessible for first-time buyers, particularly those with smaller deposits. As a result, lending to first-time buyers has increased 14% since last October. Yesterday’s announcement of the Starter Home initiative – allowing 100,000 first-time buyers to buy a new home with a 20% discount – also shows that the government recognises the ongoing need to help aspiring homeowners get on the property ladder. However, improvements to mortgage finance will soon be useless if we don’t address the growing property shortage currently facing the UK. While the number of new homes in construction has improved, we are still a long way behind where we need to be. Although there are no quick fixes, increasing the supply of homes on the market must be a major focus for 2015 if we are to significantly improve conditions for first-time buyers.”