Essentially they were abandoned by the market. And in the 10 years since, although multiple initiatives have been announced to help them, many have still found themselves desperately struggling to reach that first rung of the property ladder.
Late last year, however, things took a decidedly positive turn.
The scrapping of Stamp Duty for first time buyers of homes up to £300,000, announced by chancellor Philip Hammond in November last year, is one of the most welcome announcements for the housing market for years.
And if latest figures are to be believed, thousands are already benefiting. On a visit to Wokingham in Berkshire earlier this month to meet a buyer who has benefited from the cut, the Prime Minister revealed a massive 16,000 first-timers have already saved up to £5,000 as a result of the changes.
The return of the first-time buyer
So does this mean first-time buyers are back? After years left out in the cold thanks to soaring house prices, strict lending criteria and the dominance of buy-to-let investors in the market, are first-timers finally catching a break?
Unfortunately, it would seem not. While the Stamp Duty changes are certainly welcomed, according to the Royal Institute of Chartered Surveyors the move has had little impact.
RICS says the majority of its members have seen no rise in interest from first-time buyers.
And why is this?
One would assume it’s because Stamp Duty was always just one of the problems.
The biggest issue is still a lack of supply and saving a few thousand on Stamp Duty, though not to be sniffed at, is not enough to change the market drastically – just as Stamp Duty, though a cost many could do without, was never really big enough to put someone off buying.
The first-time buyer market has been given a boost but more needs to be done.
The good news is lenders are ready and willing to provide for these borrowers.
There are currently over 260 95% LTV mortgages on offer and well over 600 90% LTV mortgages.
Furthermore, average rates for 95% mortgages have fallen below 4% with most lenders opting not to pass on last year’s base rate rise for such products.
So 2018 may not be the year first timers dominate the market but it should at least be a year of progress for the sector.
