Only London fits the model of pre-credit crunch norms, 41.2% of those intending to buy in the capital over the next year will be first-time buyers – almost twice the national average.
Between July 09 and July 11 would-be first-time buyer levels dropped from 30.8% to 23.0% despite an 11-fold increase in mortgage products available to this group.
Raising a deposit remains by far the single biggest property concern for first-time buyers.
Miles Shipside, director of Rightmove, said: "First-time buyers perform an essential function at the start of the housing ladder by beginning chains that help others in the area to move as well. The emergence of so many first-time buyer blackspots has serious implications not just for those who are unable to buy for the first time, but also local housing markets in each of those regions. It is particularly bad news for first-time sellers, for example."
Rightmove’s research shows London to be the only exception to the malaise.
"In the capital, 41.2% of all that intend to buy will be first-time buyers, twice the current average of all the other regions and above the 40% level indicative of a healthy market.
"The West Midlands is the next highest at just 23.4% and serves to demonstrate how big the divide is. Indeed, the impact of the London-effect distorts the national figure to such a degree that without it, the average for the remainder of the country would be below 20% for the first time in our survey.
Shipside said: "London is often associated with the high-profile top-end cash-rich clique but is perhaps less well-known for its active first-time buyer segment which helps to drive its wider market. Despite loftier purchase prices in the capital, these figures indicate that Londoners are better placed to raise both the requisite deposit and size of mortgage to make their first step onto the housing ladder."
This quarter’s results are perhaps all the more surprising given that there is evidence of greater focus on first-time buyers by lenders.
The number of mortgage products targeted at first-time buyers has increased from 13 at the time of the July 2009 report to the 138 currently on offer.
Further research by Rightmove reveals three key issues why first-time buyer numbers are low:
* Difficulty in raising a deposit
More than 2 in 5 first-time buyers state that raising a deposit is their single biggest property market challenge, by far the largest concern expressed;
* Concerns over financial security
A further 1 in 5 first-time buyers cite a combination of concerns about meeting monthly mortgage payments and their own personal financial circumstances as a barrier to
entering the property market
* "Over-priced" property prices
5 out of 10 buyers in the UK state they feel property is over-priced in their local area, however this figure jumps to seven out of ten among those looking to buy for the first time.
Shipside said: "It’s tough for first-time buyers to save for a deposit in the face of the rising costs of living. Even though the number of available mortgage products for this buyer group has improved, it appears that deposit requirements are still proving a major hurdle. On-going concerns over financial security and out-of-reach asking prices are further adding to the average first-time buyer’s problem pile."
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