UK’s first-time home buyers drop in 2011

UK’s first-time home buyers drop in 2011

LONDON - Reuters
UK’s first-time home buyers drop in 2011

A five bedroom property on an expensive residential street in London is seen on Dec 1. The number of British first home buyers is waning, a recent survey shows. REUTERS photo

The number of first-time home buyers in Britain fell to a record low in 2011, despite house prices declining to their most affordable levels in eight years, mortgage lender Halifax said in a survey

Halifax, which is part of Lloyds Banking Group, estimated there were around 187,000 first-time home buyers in 2011 - down 7 percent from 2010 and representing the lowest annual total since its records began in 1974.

The findings come a month after Conservative Finance Minister George Osborne announced plans to help Britons onto the property ladder, with the housing market hit by the country’s economic slowdown.

Osborne said the country’s Conservative/Liberal Democrat coalition government would provide a mortgage guarantee scheme to help struggling first-time buyers put down deposits for property loans.

Many British banks have tightened up their mortgage lending criteria after the 2007-2008 credit crisis, which began when loans made to poorer home owners in the United States began to default.
Britain has also proposed stricter mortgage lending rules to prevent a recurrence of irresponsible lending practices that led to the crisis.

‘Liar loans’

The Financial Services Authority regulator outlined proposals this month for more thorough checks on mortgage applications, after the industry was blighted by so-called “liar loans” - self-certified mortgages whereby the borrower was able to obtain a mortgage without giving any proof of income.

A Reuters poll this month forecast a 1.7 percent fall in British house prices in 2012, although analysts said prices could fall by more than that if the euro zone sovereign debt crisis worsened