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What is a First-Time Buyer?

The media regularly devotes headlines to the plight of the first-time buyer trying to get a foot on the property ladder, along with a considerable focus on the contribution first-time buyers apparently make to the property market, with house prices being significantly ?fuelled from below?.

These headlines conjure up images of struggling first-time buyers who have just got their first job and are having difficulty raising enough money to purchase their first home. However, this sector of the market possibly has less of a bearing on the market than one might expect because of the changing definition of the first-time buyer.

Far from being ?real? first-time buyers, 20% of those recorded as such have actually owned property in the past and are re-entering the market. Financial institutions have been known to label anyone who does not currently own a property as a ?first-time? buyer as it categorises them as valuable ?new business? to be pursued.

Likewise, estate agents often refer to anyone who has no related sale as a ?first-time? buyer as it defines a purchaser unencumbered by a linked transaction, i.e. a hot buyer!

The chances are that some of these buyers may well have large deposits (we regularly come across ?first-time? buyers looking up to ?500,000). Many of these buyers are likely to be at least into their 30?s and may have been renting following a sale, a job transfer, a divorce, or travelling.

The sad truth is that any void left by the ?youngsters? is being amply filled by the buy-to-let market, which is supplying the rented accommodation for those very people who would otherwise be first-time buyers themselves. It certainly keeps the market afloat, albeit at the expense of those who would prefer to own their own home earlier in life!

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