Should Aspiring First Time Buyers Be Feeling The Pinch?

56% of properties in the UK are now considered as affordable to first-time buyers (FTB) who are looking to acquire their first property.

According to Post Office Money, the combination of stagnant house prices and rising wages has created a perfect storm for improving the affordability of property.

The research analysed Office for National Statistics data, finding annual house price increases of 0.9% whilst the average FTB annual income has increased by 1.2% to £48,289.

This has left the average house price of £282,713 just under six times the average FTB annual income.

The research claims that areas like Blackpool and Lincoln who boast an average property price of £110,000 and £149,000 respectively whilst average household income for FTBs across both regions is comfortably over £40,000 which means that 100% of the average homes in the areas are affordable.

However, the research fails to consider the sacrifices and difficulties many aspiring homeowners face, especially when they are already renting privately.

According to recent research, conducted ahead of the First Time Buyer Home Show, 65% of respondents feel they need to use supportive schemes like Help to Buy if they are to stand any chance of achieving home ownership.

Overall, the poll highlighted the modern day difficulties in saving for a deposit. 10% have spent at least seven years saving whilst over half (54%) are set to buy their first home with a partner because they are unable to buy alone.

The majority of aspiring property owners are forced to limit the amount of luxuries they can have just to stand any chance of saving anything at all. 81% sacrifice holidays and even simple social occasions are avoided to ensure the deposit money is saved each month.

Unfortunately, those already privately renting are struggling to save anything on top of their rent with 65% feeling trapped in privately rented accommodation.

Lynda Clark, editor of First Time Buyer magazine, said:

“What is clear from our survey is that there is still a strong desire to get on to the property ladder and home ownership is a priority for many.

“But we can now see an increased awareness of many of the new home buying schemes available that have become more accepted by buyers over the last decade. Schemes such as Help to Buy and shared ownership, which require a lower deposit, are now widely recognised as a way to get on to the property ladder.

“While we expect that in order for first time buyers to save there may be some sacrifices to be made, we were shocked to find out just how high this number was. With four in every five prospective home buyers having to give up on nights outs, takeaways or holidays.”

Ross Hunter, Post Office Money, commented:

“While we have seen house price growth slow in the last year, properties can still seem particularly unaffordable for first-time buyers.

“We know that saving for a deposit remains the most significant hurdle for young buyers to overcome in order to achieve their home ownership aspirations. It can take years of dedicated effort in order to gather the necessary funds.

“There are a number of ways that prospective homeowners can reduce their time spent saving, such as taking on a fixer-upper property or looking in a cheaper area close to where they might have previously considered.

“While we may be seeing the first indications of a ‘buyer’s market’, we still know that saving for and ultimately purchasing a home is a difficult process. Finding which areas are most affordable in cities local to you is key to making a personal plan of action.

Are first-time buyers offered enough help to gain a foothold on the property ladder? Are there any other forms of FTB relief that could be trialled?