Outlook for first-time buyers improving

The outlook for first-time buyers may be becoming more positive according to recent research.

Published by Aldermore, the most recent First Time Buyer Index (Q3) indicates that just over a third of those asked (35%) expect their first step onto the property ladder to be difficult, down from 2016’s figure of 39%.

As well as this, stability in prices over recent months has led to a fall in those who believe it to be a significant hurdle to accessing the property ladder, with the proportion down by 10% annually – falling from 37% to 27%.

Across the UK, the main issues continue to be finance related, with raising a deposit and the price of property being the most significant concerns.

However, the extent of these concerns are regionally diverse, with just 26% of London respondents seeing price as the main barrier compared to almost half (45%) in the East of England.

In the South East, one in three first-time buyers felt that rising prices and locating an affordable home were the most prominent hurdles – a proportion which reached just 19% in the North East.

An issue which is becoming more prominent, however, relates to mortgage affordability. Whilst this figure was at just 5% last year, now 12% of first-time buyers see it as a barrier to accessing the property ladder.

Where saving for a deposit is concerned, the figures indicate that those trying to get onto the property ladder are becoming less reliant on the Bank of Mum and Dad.

First-time buyers are now more likely to purchase a house by themselves, and whilst the majority (69%) would consider living with or are currently living with friends or family to raise a deposit, this figure has fallen by 10% since last year.

It is also worth noting that it is not just the younger generations that are in this position. 41% of those aged over 35 are considering living with family or friends to access the property ladder or are currently doing so.

When asked what would ease access to the property ladder, 26% felt that building more homes would be the most useful, with 25% stating that those buying for the first time should receive a special stamp-duty free allowance. 24% feel that introducing better mortgage products would help.

Commenting on the figures was Charles McDowell. The Commercial Director at Aldermore stated: “Over the past year we have tracked the outlook for first time buyers as well as the obstacles they are facing to get on the property ladder.  While the situation is by no means easy, there does seem to be light at the end of the tunnel for those trying to buy their first home.  Although property prices remain a hurdle, slower house price increases have given a glimmer of hope to those trying to get on the ladder for the first time. Instead, mortgage affordability and difficulties in securing a mortgage are becoming more of an issue for first-time buyers.

“At Aldermore, we are fully aware of the issues facing first time buyers, and we want to do all that we can to support them when it comes to securing a mortgage. Our human approach to lending enables us to consider each case on an individual basis. We also offer various products to help first-time buyers, including the family guarantee mortgage and 95% mortgages for customers who have a smaller deposit. We always recommend customers shop around to ensure they choose the best mortgage product for their individual needs.”

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