Financial crisis 'has affected FTBs'

Posted: 23 Nov 2011 16:58:54 GMT

FTBs are postponing purchases in order to save up a deposit, it has been suggested.

The global economic downturn has had a significant effect on the actions of first-time buyers (FTBs) looking to get their foot on the UK's property ladder, it has been claimed.

Speaking at the Northern Housing Consortium, David Miles, external member of the Monetary Policy Committee (MPC), claimed the financial crisis has forced FTBs to postpone their purchases in order to save cash to put towards larger deposits.

In addition, Mr Miles explained these house hunters are likely to increasingly consider alternative schemes for funding their buying with more outside equity.

The industry figure - who joined the MPC at the Bank of England in June 2009 - noted he is not surprised recent financial stresses have had such an impact on the housing market, adding: "The disposable income of the majority of households has fallen - uncertainty about future levels of incomes has increased sharply."

He observed a lack of clarity can serve to push down the value of long-lived assets, of which houses are a prime example.
 

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