First-time buyers prepared to 'pay over the odds'
Monday, 06 February 2006 12:00
First-time buyers are increasingly prepared to offer a premium for a home to get onto the housing ladder, new research shows.
One in five first-time buyers in the UK are prepared to offer more than the asking price of a property, according to Yorkshire Bank.
This is in contrast to 12 months ago when just 13 per cent of newcomers to the housing market were prepared to offer above the asking price.
It is linked to increasing optimism in the property prices, with the number of people expecting property prices to rise reaching an 18-month high of 55 per cent in December last year.
Yorkshire Bank's Gary Lumby said: "Buyers are starting 2006 in a more positive mood than last year, when there seemed to be a lot more uncertainty regarding where the housing market was going.
"The market has been showing some encouraging signs of growth in the last few months. House prices have been rising - albeit modestly - and the number of mortgage approvals is up.
"In fact, the Council of Mortgage Lenders recently reported record December lending figures. This more positive outlook is being supported by expectations of a further cut in interest rates in the next few months."
Further indicative of the changing mood of the property market are figures showing that 16 per cent of sellers would be unwilling to accept offers under the asking price, up four per cent on the same month last year.
Sellers are likely to benefit from a more robust market in 2006, according to the latest Yorkshire Bank Housebuyers' report, with prices rising and more pressure on buyers to offer the asking price.
The poll of 2,000 people by BMRB for Yorkshire Bank also indicates that higher council tax is deterring first time buyers, with 23 per cent of first-time buyers delaying making a purchase until local councils announce charges.
Comments
Newsletter sign up