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The National Association for Estate Agents is calling for more support for first time buyers as the property market continues to struggle. They believe the boost from below will ripple upwards, stimulating the whole market.
Mark Hayward, President of the NAEA, said: “Assisting those seeking property at the start of the ladder could help to generate upward momentum in the market. The Stamp Duty Holiday provided a degree of breathing space and without it the prospect of homeownership will mean more months of saving for many people.
“Although the latest figures from the Council of Mortgage Lenders have shown a 24 percent rise in gross mortgage lending in May, this follows a very poor performance in April. Although the average UK house price has dropped by 3.29 per cent to £226,827 year on year, just 12,600 loans were advanced in April, down 48 per cent on March data. It is likely we will see lending levels continue to fluctuate in the coming months until an adequate mechanism to support the first time buyer market is introduced and restrictive lending policies are curtailed.”
They also offered a warning to prospective buyers not to bite off more than they can chew, but still try to bargain well. The NAEA also believe buyers should look at other options such as joint ownerships to help make buying a reality, but also said caution would be needed.
“In this tough market, it is important that those who are still able to buy think honestly about what they can afford and agree on a bid ceiling before entering into negotiations with the vendor. It is easy to get carried away so house hunters should resist the temptation to reveal their maximum budget, leaving enough room to make additional offers if the initial one is rejected. Researching prices of similar properties in the postcode and what they were sold for can also provide a degree of flexibility when negotiating.” Said Mr Hayward.
“If costs are stacking up, joint ownership is an alternative option. Increasingly, first time buyers are buying in partnership with friends or family, which means sharing the deposit, bills and Stamp Duty costs as well as purchase price. This can prove an innovative way to overcome steep mortgage lending requirements but ensuring trust and transparency is the key to the success of this type of purchase. Both parties should sign a joint ownership agreement, clarifying exit strategies in case the circumstances of any partner change.
“These kinds of measures can certainly help to minimise costs and help first time buyers get onto the housing ladder in what is proving a very difficult market place. But what we need to see is much more commitment from the Government and the major lenders to help lift the barrier house hunters trying to buy, currently face.” He added.
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