Latest research suggests first time buyers struggle to get first home
Some 22% of aspiring first time buyers in the UK are currently living with their parents and 26% of them believe the will have to do so for five years or more to save for a house deposit.
And 10% think they will have to stay with their family for three to four years, according to the latest quarterly first time buyer index from specialist bank Aldermore.
The situation is unlikely to get better as 31% strongly agree that buying a home is unachievable for them at the moment, a sentiment which is consistent quarter on quarter.
The index report suggests that those seeking to get on the housing ladder do not think the Government is doing enough to support the first time buyer sector despite the Help to Buy schemes it has introduced in recent years.
When asked what the new Government should do to better support first time buyers, some 25% said it should address rising house prices and this figure increases to 31% in London while 10% think building more new homes should be a priority.
Some 14% believe that bank and building society lending criteria should be adapted to better help first time buyers.
Overall 91% think it is difficult to get on the property ladder, slightly down from 94% in the previous quarter. Raising a deposit continues to be the biggest obstacle faced by first time buyers, with 35% believing this is a bigger hurdle than rising property prices which is a concern for 26%. In London 41% believe property prices will prevent them getting on the ladder.
The report found that 22% are planning to use parental or family assistance for their deposit, and this rises to 27% in London. The number planning to use their own savings to fund their deposit has risen to 23%, compared to 18% in the previous quarter.
‘First time buyers have a notoriously difficult time getting on the property ladder. Since saving an adequate deposit remains the biggest obstacle, more and more people have had to move back into the family home to boost their savings,’ said Charles McDowell, Aldermore’s commercial director for mortgages.
‘We believe strongly that first time buyers are the driving force of the property market but our Index reveals just how hard buying a first home really is and is likely to remain so for the foreseeable future. Low levels of confidence amongst this group will have ramifications further up the housing chain so it’s imperative that more support is offered,’ he pointed out.
‘We know that first time buyers are relying on the new government to provide much needed solutions but following the recent general election, housing policy is likely to be reviewed again under the newly appointed housing minister, meaning it remains more uncertain than ever,’ he added.