With the average price now generally out of the reach of the FTB, Firstrung has claimed that mortgage applications below £100,000 are virtually extinct.
Paul Holmes, Firstrung operations director, said: "Following on from recent reports declaring the scarcity of first time buyers, (the NAEA suggesting first time buyer enquiries and market share is as low as 10%), Firstrung has recorded an alarming 'drop off' for mortgage enquiries below 100K. In the applications processed this month we estimate only one percent were for mortgages of less than 100K, in fact the majority are for mortgages in excess of 135K, at this level the enquiries are predominantly in the S.East of England or Scotland."
Holmes also suggests that the multiples of salary versus required mortgage is closer to six times salary, he said: "We refute the CML's recent claim that first time buyer multiples of salary versus mortgage is currently running at approx. 3.3, our experience suggests the multiple needed is in fact closer to five or six times salary, certainly it's now become an increasingly rare event to process an enquiry for multiples at levels circa three times salary levels. We also disagree with the CML's claim that mortgage approvals for first time buyers are on average for mortgages of 115K as in our experience it is closer to 136K. This would fit with the DCLG suggestion that first time buyers are paying on average 160K for their first property and our own research suggesting an average first time deposit of circa 15 per cent."
On unusual applications Firstrung has noticed a growing trend in applications for houseboats and mobile homes situated on permanent caravan parks. Holmes said: "Whilst we can understand the quirky desire for houseboats even the price of these have risen spectacularly over recent years due to speculation and the cost of exclusive and attractive mooring rights.
"However, to witness applications for mortgages on permanent mobile homes is simply a sad indictment of the overall paucity of first time buyer opportunities that currently exist within the UK. To witness the price of mobile homes reaching in excess of 135K in parts of the S.East and S.West of England, and first time buyers reducing themselves to actually considering this as a viable alternative to traditional home ownership, should be a phenomena that encourages central government to immediately investigate a housing policy that is obviously now deeply in crisis."
