On the list for the most hoped possibility for the housing market in the coming new year is the first time buyer and that is indeed at the top of the list.  The housing market saw a boost in the first of this year as the stamp duty holiday was drawing to a close.  The boost helped but it was short lived for as soon as the holiday ended so did the wave of first time buyers. 

The property ladder has remained frozen without buyers to take on the starter homes of homeowners hoping to upgrade to a larger property.  Without the ability to sell their home they cannot move in to the larger property that someone else is hoping to sell.  Then they cannot move home to another larger property or downgrade to a smaller one.  Without the first time buyer little movement occurs on the property ladder.

As house prices decline property values begin to drop and that then is a problem for the homeowner that isn’t even thinking of selling.  It impacts them by hampering their ability to increase their equity levels through rising property values. 

Each day in the UK there are homeowners that are denied remortgage possibilities due to a lack of adequate equity.  This in turn puts that homeowner at the mercy of their lender’s risky standard variable rate which in this past year increased several times by some lenders despite the Bank of England’s standard base interest rate remaining unchanged.

Homeowners and home sellers are not the only ones impacted by the lack of first time buyers.  As more hopeful home buyers remain renters rather than buyers the level of rent fees rises with demand for rental properties.

Overall, the economy needs the return of a stronger housing market and that can be boosted by the return of the first time buyer in 2013.