FTB's get hurt

As more bad news hits investors in the property market, first-time buyers start to get some bad news.

It seems that the paradigm in conventional property markets has shifted from explosion to implosion as bad news seems to come out of collapsing property markets on an almost daily basis.

Where these property markets were once fuelling the fire of their respective economies, now they are bringing them down to recession.

The situation has gotten so bad that when it was announced earlier today that commercial property funds might lose significant amounts of money over the coming months, the news was received with a calm acceptance rather than a panic that usually follows such an event. While this is ultimately a good thing - it will control fluctuation in an already precariously positioned international property market - it is also somewhat disturbing because it shows an investor base that is subdued and almost expectant of bad news when it comes.

However, people who already have their money involved in property investments are not the only people that are going to be hurt by the property markets falling apart in western countries and the subsequent credit crunch that has accompanied those events. As it turns out, even people that have nothing bad against their credit record and are first time buyers in the property market are also going to be hurt.

Case in point of this is the United Kingdom, where first time buyers of property in the UK property market were expected to pay twice the deposit if they wanted to get financing for their mortgage. Even with the dip in property prices, that represents a large down payment that very few in the middle and lower classes have the ability to pay up front.

This means that not only is the situation bleak for people with their money tied up in property investments, but it also means that demand is artificially being decreased because of the fact that first time buyers are not able to get the same deals on houses they were able to get this time last year. That is not a good combination for reenergizing recessed property markets.

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