"First time buyers are the driving force of the property market but our Index reveals just how hard it is for them to get on the ladder, even more so for those who are self-employed"
The latest Aldermore research has found that almost two thirds of of self-employed people do not know how they will manage to buy their first home.
Aldermore also found that a third of recent first time buyers say they had to give up being self-employed to get a mortgage.
The research highlighted that almost one in three (32%) raising the deposit is the biggest obstacle, whilst 14% said the biggest hurdle is just being able to secure a mortgage. A quarter of first time buyers will rely on their parents for help and over one in 10 (12%) currently trying to save for a deposit say they have taken on a second job to earn extra money.
Concern around mortgage affordability has increased from 6% in Q4 last year to 10%. Of those who have recently bought, the main problem experienced by almost one in five (18%) was saving enough for a deposit, whilst one in ten (10%) found the whole process very difficult. The number of those who will be joining forces with their partner in order to fund their deposit has risen to 45% from 38% in the last quarter, meaning the number of people buying with their partner has also increased considerably from Q4 2016, from 45% to 64%.
When asked what could be done to improve the lot for first time buyers, the key request is to address rising house prices (46%). For two in five (39%), an extension of the Government’s Help to Buy schemes would be gratefully received whilst 30% just want to see the whole house buying process simplified. For 37% of those who are self-employed, introducing better mortgage products is key, as well as adapting the criteria for self-employed borrowers (33%).
Charles McDowell, Aldermore’s Commercial Director, Mortgages, said: “First time buyers are the driving force of the property market but our Index reveals just how hard it is for them to get on the ladder, even more so for those who are self-employed. Low levels of confidence amongst these groups will have ramifications further up the housing chain so it’s imperative that more is done to support both segments of our society, paticularly with levels of self-employment continuing to rise in the UK.
Raising a deposit is something that continues to be cited as the biggest hurdle by first time buyers, with a large proportion unable to do so without family help. With recent data showing house prices increasing by 2% in the month of February, there seems to be no let up for first time buyers who are having to stump up more savings up front. House prices are inevitably impacted by demand and supply and more needs to be done to address the latter.
In the Housing White paper the Government stated it will focus on delivering the right type of housing in the right places through a new assessment of housing needs, and this is something we fully support to better provide for first time buyers."