Ability to buy hits all time low

NHBC's First Time Buyers Ability to Buy Index hit an all time low during the second quarter of this year.

The Index, which takes into account the average cost of homes bought by first time buyers, average income and mortgage interest rates, fell to 41 points - the lowest level since the Index was started 28 years ago.

Imtiaz Farookhi, NHBC Chief Executive, says: "The Index reduced dramatically in the second quarter to below the previously lowest level in 1989 and is reflective of the increasing difficulties being experienced by those wishing to buy their first home."

NHBC statistics also showed a strong year-on-year rise in new house prices, with the average price of a new home in Great Britain costing £194,000 in quarter two this year - six per cent higher on the same period a year ago (£183,000).

The most significant average price rise was in Northern Ireland, where the average price of a new build property in quarter two this year was £200,000
- 48% higher on the same period a year ago (£135,000).

Additional figures from NHBC show that in the UK there was a total of 52,888 applications to start new homes during the second quarter of 2007 - a seven per cent increase on the same period in 2006 (49,482). Of that total, 42,485 related to private sector activity (i.e. excluding housing associations), showing little change on the same period a year ago (42,535).

Housing association volumes in the UK increased significantly during quarter two 2007 with starts totalling 10,403 - an increase of 50 per cent on the same period a year ago (6,947).

NHBC UK figures show there were 50,721 new build completions during the second quarter of 2007 - a one per cent decrease on the same quarter last year (51,208).