Rate cut 'won't tempt first-time buyers'

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Rate cut 'won't tempt first-time buyers'

Fri 11th Apr 2008

First-time buyers are likely to remain reticent about stepping onto the first rung of the property ladder for the time being, despite yesterday's quarter-point rate cut, online property conveyancers Convex.net have said.

Duncan Samuel, the website's managing director, stated that first-time buyers are currently "thin on the ground", which he blamed on the general perception that the housing market has further to fall and the trend for lenders to withdraw high loan-to-value mortgages.

Although further rate cuts could potentially help the situation, he said they would have to happen fast.

Mr Samuel also suggested that interest rate reductions on their own would not be effective - they would need be combined with other measures.

He urged the government to consider offering new incentives to first-time buyers, such as reducing stamp duty.

Following Abbey's decision to withdraw its 100 per cent mortgage, moneysupermarket.com warned that first-time buyers are in danger of becoming extinct as the finance available to them dries up.

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