I’m always intrigued when I speak to housing ‘experts’ about how they consistently claim that the number of first-time buyer mortgage approvals is preventing them from selling properties. Is this really true or is this just another quick answer to something that may go a bit deeper?

Well, I’ve done the analysis. According to Council of Mortgage Lenders figures, the real number of first-time buyer approvals has fallen since the beginning of the economic crisis.

 The trouble is, when we then overlay this data with the overall number of mortgage approvals, our perception of the market changes drastically.

In fact, when we actually compare the percentages of total approvals and mortgages for first time-buyers, we see that the number of first-time buyers is either flat or growing! (I’ve removed the figures for January 2010 as this does seem to have been an extreme month (probably due to the weather).

Of course, what this analysis doesn’t consider is the number of people who purchase property in cash (who typically are not buying the kinds of properties that are built for first-timers) but I still think it shows that perception can sometimes be very different from reality.

Perhaps the real problem to consider isn’t that there aren’t enough first time-buyers obtaining mortgages per se, it’s more that the total number of house buyers has plummeted since the 2007 peak. More on that in my next blog post…

The twitter feed of Jablite's resident housing and economics expert, Damien Pooley, can be found at www.twitter.com/damienpooley