3 out of 4 First time buyers have funds for deposit

A significant proportion of first time buyers have mortgage approval while most of them have saved up cash for a deposit according to a new survey by leading Irish property website MyHome.ie.

A significant proportion of first time buyers have mortgage approval while most of them have saved up cash for a deposit according to a new survey by leading Irish property website MyHome.ie.

According to the findings, one third of first time buyers have received mortgage approval while a further 36% are actively seeking approval.

Seventy five per cent of first time buyers say they have the required funds to pay a deposit while 60% of existing homeowners say they have sufficient funds.

The majority of the 1,800 people surveyed strongly believe that house prices are set to fall further in 2012. Ninety four per cent of first time buyers believe they have further to go while 86% of homeowners see them declining further.

Despite this, half of first time buyers said they plan on buying a property in the next 12 months, while 42% remain undecided. Nine per cent said they wouldn’t be buying.

However only 20% of existing homeowners are planning to buy a property, 38% say they won’t be while the largest group remains the undecideds on 42%.

According to the survey two thirds of existing homeowners and 52% of first time buyers do not believe financial institutions are lending.

While 65% of homeowners believe institutions are not lending, 43% believe financial institutions are over regulated or over cautious when granting mortgage approval.

First time buyers have a more positive view of financial institutions with over half believing they are lending. However they are split evenly – 38% each - on whether they are over regulated or over cautious. A quarter of those surveyed are unsure.

Angela Keegan, Managing Director of MyHome.ie said the findings showed that availability to mortgage finance and consumer confidence were the key factors influencing participation in the housing market.

While the over whelming majority of first time buyers believe house prices are set to fall further 37% believe they will fall moderately (between 5 to 10%) while 34% believe they will fall slightly (1 to 5%) and 20% believe they will fall significantly (10 to 15%).

Homeowners had a very similar outlook with 35% believing they will fall moderately, 34% that they will fall slightly and 14% believing they will fall significantly.

Keegan said these figures might help explain why so many were still planning to buy in the next 12 months. “First time buyers monitor the market very closely and while most of them believe prices look set to fall by up to 10%, many may well be factoring in mortgage interest relief measures announced in the Budget. The survey shows that the 3 bed semi d remains the house of choice for prospective buyers and we believe this house type in good locations will be the first to recover” Keegan said.