The number of first time buyers has fallen by a fifth since March 2006, according to Moneysupermarket.com's latest Mortgage Map.
The Mortgage Map, which looks at trends in house buying, also claims the number of homeowners on fixed rate deals is increasing.
The research found the number of people classed as first time buyers has fallen by 20%, which Moneysupermarket.com says is largely due to rising house prices, high interest rates and the failing availability of suitable properties.
Louise Cuming, head of mortgages at moneysupermarket.com, comments: “It looks like the attrition of first time buyers as they either move out of owner occupation or onto second time purchases is occurring at a much faster rate than new first time buyers coming into the market.”
Cuming says the lack of first time buyers could spell trouble for the housing market and the economy as a whole. First time buyers help provide much needed liquidity in the housing market, according to Moneysupermarket.com.
A lack of certainty regarding interest rates has also caused the number of homeowners using fixed rate mortgages to increase. Currently, 43% of borrowers are on fixed rate deals of between one and five years, compared to just 39% in March, according to the research.
“It's not surprising some potential first-time buyers are getting cold feet and steering clear of home ownership, and the latest industry figures from the CML seem to be painting a similar picture albeit only measuring homeowners, with the percentage of first-time buyers falling 6 per cent against the total borrowing population for the first half of this year compared to the same period last year”, Cuming adds.
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