UK housing transactions could rise by one-fifth between 2015 and 2020 – but the forecast depends on first-time buyers being able to get mortgages with small deposits.
The research, by conveyancer My Home Move, predicts that if this happens, transactions will rise from 1.23m last year to 1.49m.
The forecast, which also depends on average mortgage rates and unemployment both staying low, is modelled on average first-time deposits falling from the current 17.1% to 10% by late 2019.
Doug Crawford, CEO of My Home Move, said: “Although house prices have improved since the economic crash, property transaction levels, which are a key indicator of market health, are yet to return to their peak of 2007.
“This report highlights the critical importance of unlocking access to high loan-to-value mortgage products for first-time buyers, if we are to see transaction volumes grow and the health of the market remain.”
The independent research was commissioned by My Home Move as part of a major report published today called ‘Bricks and mortar in a digital world: 15 years of the property market’ which coincides with My Home Move’s 15th anniversary.
Comments (2)
I’m not sure its all about deposits. I am happy if the loan is affordable. When I first moved to London in 1991 and bought. I was given 3 x salary while paying 14% interest. Today I pay 2.49% interest meaning I could borrow 15 x salary and still have more disposable income.
I get the ” Big short theory” but even people with low LTV would have suffered had low interest rates not saved the day. If you are trapped in a property as a result of ever changing mortgage criteria then having a big equity sum in the property won’t make any difference.
There are a lot of people paying their mortgage every day who would be denied the very mortgage they pay if they applied today. How do these homes ever get freed up?
I think I disagree. I don’t have stats to fall back on but the more loans we give out with small deposits, the higher the chance of the average quality of the loan falling, and the higher risk of people defaulting.
It’s a bit of a “Big Short” theory but I don’t fancy a whole bunch of loans to aspiration FTBs to do a lot of good moving forward.