3m Less First Time Buyers Over 10 Years

The Intermediary Mortgage Lenders Association (IMLA) has issued a report suggesting that there have been cumulatively 3.1m less First Time Buyers (FTBs) over the last 10 years looking to get on the property ladder than there were in 2013.

FTB took advantage of lower prices after the credit crunch crisis of 2008/9 and then affordability continued to climb to a peak where the largest levels of affordability climbed but then started to fall away despite interest rates falling to their lowest levels between 2013 and 2022.

Interest rates are much higher now and have been climbing from 2022 onwards to curb inflation.   The IMLA has called for any new Government to review the First Time Buyer market to improve access to mortgages rather than renting.

Our view

FTBs are the backbone of the property market. Without new buyers entering the market, those that bought as FTBs a few years ago cannot sell and move up the property ladder and so on.  The population is increasing, demand for property is increasing but less are able to get on the ladder.  If there are c300,000 to 400,000 less buyers then wealth transfer will continue with existing ‘older’ property owners better placed to buy properties to let to those would be FTB that cannot to buy and are forced to rent.

A healthy property needs a strong FTB market and we urge any government to develop schemes that can help people onto the ladder.  Zero Stamp Duty breaks for FTBs are simply not enough.  Perhaps reintroducing MIRAS (Mortgage Interest Relief At Source) which used to be tax relief on mortgage interest payments (1983 to 2000) originally at £30,00 for each person and £60,000 for couples meant that first time buyers got tax relief on any mortgage interest they paid on their mortgage up to £60,000.  

Most FTBs in the 1980s were buying property between £20,000 and £60,000.  Perhaps a new MIRAS for FTBs only up to £200,000 loans would fully benefit the property market.