House buyers ready to pounce

TWO-THIRDS of first-time buyers plan to purchase in the next 12 months, while three-quarters have their deposits ready.

The news comes as experts reveal that banks are starting to phase out 40-year mortgages as house prices become cheaper.

A survey from MyHome.ie found three-quarters of first-time buyers have either received or are seeking mortgage approval, the same percentage as in September last year, suggesting activity in the market has held firm over the six months.

Of those who say they won’t be purchasing in the next year one-in-four said they were waiting for prices to fall further, while the same number cited the economic climate. Sixteen per cent said the lack of mortgage approval meant their plans were on hold.

Economist Paul Murgatroyd said first-time buyers do not expect market and economic conditions to deteriorate significantly in the next 12 months.

“There is an expectation that house prices still have slightly further to fall but this survey reveals that this is clearly not the most critical factor for them when it comes to purchasing. Sixty-four percent say they still intend to purchase in the next 12 months. This supports research which shows that location is a more important criterion than price for the first-time buyer,” he said.

Mr Murgatroyd said first-time buyers are now the largest proportion of people taking out mortgages for residential property, with Dublin first to see increased activity.

Meanwhile director of the Irish Mortgage Corporation, Frank Conway, said it seems banks are starting to phase out 40-year mortgages. He said during the boom, almost one-in-five first-time buyers purchased their new homes with mortgages that were 40-year terms.

“In recent weeks, we have seen some substantially reduced properties being launched onto the market where the cost of financing those properties is scarcely more than the cost of a packet of cigarettes per day.”