24 June 2005
First time buyers are returning to the property market, as many believe interest rates will fall in the near future.
A survey by Mortgages Direct found that first time buyer levels increased by five per cent with 40 per cent of mortgage applications coming from first timers.
Last month there was also an eight per cent increase in tracker mortgages suggesting growing optimism in a forthcoming decrease in interest rates.
"There is a growing belief that the Bank of England will decide to lower the interest rates in the imminent future," commented the director of Mortgages Direct, Peter Gladdy.
"Despite the Bank of England's decision to freeze interest rates for the time being, the substantial increase in the percentage of borrowers opting for tracker mortgages and variable mortgages over the past month hints that consumer confidence has switched."
Mr Gladdy also feels the growth of first timers is also partly due to the company's first time buyer initiative.
"We have been focusing our efforts in encouraging first time buyers to step on the property ladder and it is no accident that the levels have increased this month," he explained.
Mortgages Direct is reimbursing first time buyers £199 of any upfront costs, whether that is valuation fee, arrangement fee or legal fee, once the property is bought.
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