Recent research findings suggest that millions of UK residents are opting not to move home or purchase their first property. This has resulted in the average age first time buyers to be pushed to 37.
It has been highlighted that 40% of would be first time buyers are planning on renting accommodation until they are in a position to be able to afford to buy a house. This is a direct result of the challenging conditions in the market persisting according to Moneysupermarket.
These findings are mirrored with statistics showing the availability of mortgage products from lenders to first time buyers having declined by 12% year on year. The current average loan to value (LTV) for mortgage products on offer for first time buyers is 78%, this means that on a property worth £150,000 a deposit of £33,000 would be required. A deposit of 22% of the value of the home is way over the amount most first time buyers can afford hence it simply is not an option to consider for many people.
There are still positive signs in the market if you look hard enough as there has been an increase of 20% since 2011 in the number of mortgage products available for buyers with only a 10% deposit. There are now 209 mortgage products available add to that the average interest rate on mortgages having decreased 1.14% since April 2009 and you can see that there are good deals to be found.
Buying a house and owning your own home has been an object of desire in the UK, even an end goal for some people, which is why this shift is of concern to everyone involved in the property industry. However, it does not come as a shock even with the stagnant housing market, with many people not being able to sell a house for the desired price they are looking for prices have remained high. People are simply not lowering expectations far enough from what they believe the property is worth (of what it was worth in the height of the boom). As a result property prices still remain exceptionally high and disproportionate to salaries. If you take this into account alongside mortgages remaining difficult to secure and rising living costs it is not that surprising that we find ourselves in the current predicament.
Current surveys have showed that only 9% of potential first time buyers have already saved for a deposit, with many hoping further house price drops, further highlighting the difficult time in even saving for many would be homeowners. Many are opting to rent for longer whilst saving a large enough deposit to buy a house. Even with the increases in mortgage products available for buyers with a 10% deposit, the rates are higher than if you were to scrape a larger deposit together. Couple that with stagnant prices, it appears first time buyers may well have that much needed time on their sides to save up a desposit.