Saving for a deposit is still the biggest obstacle for first time buyers in the UK with 26% saying that they will need to borrow from their parents to do so, new research has found.
Some 46% of first time buyers believe that the issue of rising house prices should be addressed as it is proving a burden and 39% believe the Government’s Help to Buy scheme should be extended.
Overall 67% of aspiring first time buyers believe that getting on the property ladder is very difficult, the first time buyer index from specialist bank Aldermore also shows.
For some, most notably the self-employed, it is even harder. Some 62% of self-employed people do not know if they will ever be able to buy a home and a third took salaried employment in order to get a mortgage, the research also found.
Aspiring first time buyers also feel under pressure to buy with 18% saying they are urged to do so by their family and a further 18% by their partner and they have to make sacrifices in order to save for a deposit with 30% cutting back on eating out, 23% on holidays and 21% working longer hours.
When asked what could be done to improve their situation 46% said policies to address rising house prices, 39% say an extension of the Government’s Help to Buy schemes would be helpful and 30% just want to see the whole house buying process simplified.
For 37% of those who are self-employed, introducing better mortgage products is the top desire while 33% said lenders should adapt their criteria for self-employed borrowers.
Then research also found that concern around mortgage affordability, up to 10% from 6% in the final quarter of 2016. This has led to more joining forces with their partner in order to fund their deposit, up to 45% from 38% in the last quarter, meaning the number of people buying with their partner has also increased considerably from 45% to 64%.
‘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, particularly with levels of self-employment continuing to rise in the UK,’ said Charles McDowell, Aldermore’s commercial director for mortgages.
‘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,’ he explained.
‘In the recent 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,’ he added.