Is there light at the end of the tunnel for FTBs?

Is there light at the end of the tunnel for FTBs?

New data and analysis covering Q3 2017 by specialist bank, Aldermore, has revealed that the outlook for first time buyers is slowly becoming more optimistic.

While a large proportion of first time buyers do believe it is still very difficult to get on the ladder, this has started to shift.

According to the report, currently just over a third believe buying their first home will be extremely difficult to buy in comparison to almost four in ten in 2016.  In addition, as the market begins to flatten, rising property prices are no longer seen as such a barrier, with a 10% decrease in those who consider it the biggest obstacle to buying their first home.

Almost one in ten (37%) found this to be the biggest barrier in 2016 in comparison to just over a quarter (27%) in 2017.
 
First time buyer barriers are shifting

Raising a deposit and property prices continue to be the biggest concern for first time buyers across the UK. However this perception differs across the country; currently almost half (45%) of first time buyers in the East of England believe raising a deposit is the biggest barrier compared to a quarter (26%) in London.  A third (33%) of first time buyers in the South East believe finding an affordable property and rising house prices are the biggest obstacles compared to a fifth (19%) in the North East.
 
The Index has also revealed that mortgage affordability and difficulties’ securing a mortgage has increasingly becoming viewed as more of an issue.  Over one in ten (12%) first time buyers believe mortgage affordability is an obstacle to getting on the ladder, in comparison to just one in twenty (5%) in 2016.  
 
Going it alone

When it comes to saving a deposit, first time buyers are more willing to go it alone and are slowly becoming less reliant on friends and family to help them save.  Three in five (59%) are currently living with or would consider living with family and friends to get on the ladder (down 10% from 69% in 2016).  
 
When it comes to regional trends, two thirds (66%) of first time buyers in the East of England are in this position, in comparison to half (51%) in Scotland.  This is in sharp comparison to 2016, when over three quarters (75%) of first time buyers in Scotland said they were either living with or would consider living with friends and family to improve their savings.

Currently living with/would live with friends and family to help save for a deposit

2017

2016

North East

52%

53%

North West

60%

67%

Yorks & Humber

58%

71%

East Midlands

55%

70%

West Midlands

57%

70%

East of England

66%

74%

London

62%

71%

South East

61%

75%

South West

57%

68%

Wales

60%

53%

Scotland

51%

75%


It is not just younger generations that are being forced to live with friends and family, four in ten (41%) of those over 35 are currently or are considering living with friends or family to help them get on the property ladder.
 
Achieving their dream could still take some time however, one in three (34%) of first time buyers believe it could take five or more years to get on the property ladder.  For prospective first time buyers, their first home is often just the means to achieve their dream home – almost a quarter (24%) are only planning to live in their first home for only four years or less, while a third (33%) will live in their first home for 5-9 years.
 
Calling for change

When it comes to what would help first time buyers get on the ladder – just over a quarter (26%) believe building more homes would help them the most, a quarter (25%) believe there needs to be a special stamp-duty free allowance for first time buyers and a quarter (24%) believe better mortgage products need to be introduced.
 
Charles McDowell, Aldermore’s Commercial Director, Mortgages, says: “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 has 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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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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