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New mortgage holders falling

Date: Wed, 24 Nov 04 Analysis

The UK has experienced the sharpest decline in the proportion of first-time buyers in a survey of Western countries.

Despite falling interest rates and mortgage costs, a decade of rising house prices has seen the proportion of first-time buyers in the UK fall more rapidly than in the rest of Europe, the US and Australia, a Council of Mortgage Lenders survey has found.

A pattern of falling home-ownership among young people emerged in half the countries surveyed, with only the US showing a significant increase in home-ownership among young people.

Across the UK 70 per cent of people now own their home, but owner-occupation now trails many countries in southern and eastern Europe.

The research also concludes that the UK mortgage market is one of the most diverse, with a proliferation of new lenders and types of loan.

CML director general Michael Coogan said the findings presented a clear case for the Government to introduce a more favourable tax and benefit policy to encourage the growth of home-ownership, particularly amongst first-time buyers.

"The tax burden on home-owners continues to grow but indexing the thresholds for stamp duty, inheritance tax and capital gains tax in line with house price inflation would help ensure that it does not worsen in future," he asserted.

"We call on the Chancellor to show his support for home-owners in the forthcoming pre-Budget statement."

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