A survey of Equifax customers who have purchased a copy of their credit report found that 70% of the first time buyers who responded felt more confident about stepping onto the property ladder as a result of the drop in property prices. The introduction of a number of new products for the first time buyer sector is also likely to have had an effect, with 75% saying that they had put a hold on their plans in the last year because of the lack of mortgage products on the market.
But the availability of a reasonable deposit still appears to be a challenge for a number of first time buyers, with only 12% having a deposit of more than 20% of the property value and over a quarter (26%) having just a 5-10% deposit. Unfortunately 35% said they have less than 5% deposit which is likely to continue to make it difficult for them to get a mortgage.
Two thirds of respondents also said that they had found it difficult to get a competitively priced deal with over a third (38%) blaming this on the size of their deposit.
However the importance of their credit history didn't go unnoticed for 30% who said they thought they hadn't been able to get a good deal because they had previously defaulted on credit or loans. And 17% felt their lack of any credit history to date had been a detrimental factor.
"Clearly the challenging financial conditions are still making it hard for first time buyers to get on the property ladder", confirmed Neil Munroe, external affairs director, Equifax. "But what our latest research, conducted in early October, shows is that there is a new level of confidence that probably hasn't existed for the last 12 months or so.”
Confidence in their financial future could, however, be the major stumbling block for first time buyers in the next few months. Nearly a quarter (24%) said they are concerned about getting into financial difficulty in the next 12 months.
