The market

Government research says there are a quarter of a million first-time buyers currently seeking help to move onto the property ladder. If any of these people want to buy in the South of England they are likely to need all the help they can get.

According to Mortgage Direct, the financial subsidiary of Spicerhaart, the level of mortgages taken out by first-time buyers in January fell by 10% to 38% (see graph). The average age of the first-time buyer through 2006 was 29, according to the Council of Mortgage Lenders, and the average mortgage was £108,839.

With an average annual income of £33,994, first-time buyers are now borrowing 3.21 times their salary, a significant increase on 2005’s multiple of 3.09. The CML statistics, released in its latest regulated mortgage survey earlier this month, reveal that only 41% of first-time buyer mortgages were on properties below the £125,000 stamp duty threshold – down from 44% in the preceding two months, and around 50% when the threshold was set in the last Budget. Still, last year, some 409,000 first-time buyers made it onto the housing ladder an advance on 2005’s low of 343,700.

The government’s much-publicised route to helping first-time buyers into home-ownership is the £100m First-Time Buyers Initiative. The project, which is run by English Partnerships, aims to build 15,000 homes across 40 sites by 2010. The first 18 sites were announced last month and will be shared between housebuilders Barratt, Wimpey and Bellway. The sites will hold a total of 700 homes.

According to the National House Building Council these can’t come soon enough with its annual figures for 2006 showing that, although 185,000 homes were built last year, the ability of first-time buyers to buy any of them plummeted.