My First Time

It's odd to think of myself as an anomaly, a quirk, an oddity, but that's what I am at the moment.

You see, I'm a first-time buyer at a time when first-timers are being priced out of the market more and more. The average price tag for a first home has now gone through £100,000, a rise of 22.6% in twelve months. The place we've bought cost considerably more than that, so we've helped to push that average up even higher. And there doesn't appear to be any sign of a reverse in price rises so the situation is likely to get worse, if slower than it has up to now.

The spectre of climbing interest rates will put off many of those who can only just about afford to buy their first home and will give others pause for thought. People in the know may well point to the fact that interest rates dropped to their lowest point for many years in July 2003 and that, prior to that point, rates of around 5% were not considered high. The first-time buyer, however, doesn't have any experience of interest rates. All he sees is the start of a climb, not the end of a trough.

Couple the predicted rise in rates with the (probably smaller than recent) rise in house prices and your average first-time buyer will be starting to think that if he can't get on the property ladder soon then he may well not be able to.

We've been very, very lucky with buying our first place. We found the house we wanted soon after we started looking and sorted out the mortgage with the only lender willing to give us the amount we needed (our options were limited by the fact that we had no deposit) in time to fix the interest rate for three years before the initial rise to 3.75% back in November. So none of the predicted rises over the next year or two will affect us until 2007 and, who knows, rates may well have come down again by then.