Moneysupermarket.com says the percentage of people classed as a ‘first time buyer’ has dropped 20 per cent since March this year, suggesting that rising house prices, rising interest rates and the dwindling pool of properties available to first time buyers are responsible.
The research also shows that homeowners are increasingly turning to fixed rate deals with 43 per cent of borrowers on a fixed rate mortgage of between one and five years, compared to 39 per cent in March this year.
Moneysupermarket.com head of mortgages Louise Cuming says: “It looks like the attrition of first time buyers as they either move out of owner occupation or onto second time purchases is occurring at a much faster rate than new first time buyers coming into the market.
“Where are they going? The rate of decline is surprising and the five interest rate rises in the last 14 months means it is now more expensive for the first time buyers to get onto the housing ladder. First-time buyers are the lifeblood of the housing market and provide essential liquidity, so the fact this segment is getting smaller is worrying for the economy as a whole.”