Survey shows fewer first-timers plan to buy in the next year

TRENDS:New research suggests that more first-time buyers with mortgage loan approval are playing a waiting game when it comes to buying, writes JACK FAGAN

A NEW SURVEY of the property market shows that 58 per cent of first-time buyers plan to purchase either a new or second-hand home in the next 12 months.

Earlier this year 67 per cent of those with loan approval had indicated that they would be buying in the near future.

The latest online survey by MyHome.ie found that 30 per cent of respondents are unsure as to whether they will buy their first home within the next year.

With estate agents currently reporting a pick up in viewings in the Dublin area, the survey shows that 37 per cent of those questioned said they planned to make a purchase in the next three months.

However, an almost similar number indicated that they would continue to play a waiting game and purchase within a six to 12-month time frame.

Only 12 per cent of respondents indicated that they would not be buying in the next year because of the present economic difficulties and the expectation that house prices may fall further.

A clear majority of those who responded to the survey – 78 per cent – said they had the required funds to pay down a deposit on a home after saving for the purchase. Only 22 per cent indicated that they were not in a position to hand over a deposit.

Angela Keegan, managing director of MyHome.ie, said a significant number of first-time buyers were looking for three-bed semis, probably because prices had fallen dramatically in the past three years, even in well established Dublin suburbs. This type of home had been significantly overpriced during the boom years, she said.

Not surprisingly, first-time buyers are largely focusing on the lower end of the property market, with 71 per cent looking for homes in the €150,000 to €350,000 price range. A further 9 per cent are prepared to pay between €350,000 and €400,000 while 8 per cent are in a position to spend €450,000 to €650,000 for the right home.

The survey also found that 48 per cent of respondents had already got mortgage approval. Only 4 per cent of those questioned had been refused mortgages.

This finding is unlikely to be endorsed by mortgage broker PIBA which claimed yesterday that the banks and other lending institutions are “cherry picking”.

Rachel Doyle, director of the Professional Insurance Brokers Association (PIBA) mortgage services, challenged recent findings by the Irish Banking Federation/PwC that 12,000 mortgages were drawn down in the third quarter of this year. “It is time to stop the bank propaganda and get real,” she says.

She says that regardless of the gloss being put on the figures, the reality was that there was a freeze on mortgage and other lending that was preventing any element of normality returning to the market. “The demand that is there is not being met, not because of prudent lending practices but because of excessively tight, unjustified lending practices.”

She contends that almost three-quarters of independent mortgage brokers were finding that between 60 and 80 per cent of mortgage applications were being declined by the lenders.

Doyle says that the reasons given by lenders for refusing mortgages were an insufficient credit history or lack of bank statements, applicants not qualifying for the amount requested, a lack of savings and the absence of job security.