Market for first-time buyers never better

THE market for first-time buyers in Edinburgh has never been better - providing you can find the money.

New figures have revealed that the number of one- bedroom homes on the market has shot up annually.

Some 741 one-bedroom flats were available this week, compared with just 551 last October, while the average value fell by 2800 in past three months, according to ESPC's third quarter report.

One-bedroom flats have bucked the current trend, which has seen the value of family homes in Edinburgh and East Lothian soar this year, as first-time buyers struggle to raise the funds for a deposit in the absence of 100 per cent mortgages.

The average price for a one-bedroom flat in the city is now 129,313, down from 132,093 in the last quarter.

David Marshall, business analyst at ESPC, said that an excess of supply over demand has swung the market in favour of the buyer.

He said: "There is clear disparity in the level of demand for different types of property. The last seven months has been a period when supply has consistently exceeded demand.

"This has swung things back in favour of the buyer. First-time buyers looking for one-bedroom flats can be confident when negotiating because there are so many of these properties available."

However, despite the fact that the figures suggest the market conditions are favourable to first-time buyers, prospective buyers still have to raise at least a ten per cent deposit to have a chance of being offered a mortgage by a lender.

Craig Esplin, owner of York Place-based broker firm Fair Deal Mortgages, said: "I deal with a couple of estate agents who have more properties on their books than they've ever had, but they can't sell them.

"Just under three years ago you could get a 100 per cent mortgage, now you need ten per cent at least, and even then the rates aren't necessarily that favourable. You need 25 per cent for the best rates.

"Most house buyers are approaching their parents to borrow money."

He added that the best way of getting on to the property ladder is not buying at the right time, but having enough capital saved for a deposit.

He said: "My advice would be to put your head down, save up, and live with your parents to save on rent if you can."