I apologize profoundly if the experts have got this right. Some experts are saying that this 1.9% house price increase may not be a freak result but the efforts of first time buyers.
The number of reported first time buyers has doubled. I guess they get this statistic from estate agent surveys so they will be some errors but it is safe to say the number of FTBs has increased.
The FTBers must be raising the deposit in a number of ways. They have been probably reading my book! The possible ways they have been raising it is
- Borrowing it
- Getting it off the bank of Mum & Dad
- they have been saving for it (remember they have been priced out for a while you know!)
- Doing a bridge and remortgage strategy (I take my hat off to them if they are doing this as this is still possible for residential mortgages)
If this is true then good on them. The FTBers that are doing this have probably been doing there research and coming to a conclusion that the market is cheap. Gosh, they could even be the next generation of investors!
There are three 95% residential mortgages. The rates are 7%+ but with rates heading downwards and competition rising we could see the 95% residential with sub 5% rates.
This could all happen really quickly. For the first time I am scared. Not because of the crash but because of the looming boom.
Get your credit in order, get your spreadsheet out, play with your figures so you can get some cash and start investing before the FTBers swallow you up.
If you want to read more than have a look at this Daily Mail article (not my favourite newspaper by the way!).
Ajay
Posted on: 7th Feb 2009
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