Meanwhile, the average purchase price of first-time buyer properties was £158,009 in April, 10.6% higher than a year ago. First-time buyer deposits averaged £25,534 in April, 8.7% more than a year before, despite additional support for lower-deposit borrowers in the form of Help to Buy.
Adrian Gill, director of estate agents Your Move and Reeds Rains, commented:
“April has seen the market continuing to fire on all cylinders, with all indicators showing strong growth. Predictions about a slow-down, or even sudden halt, to completed transactions due to lack of housing appropriate for first-time buyers have proven premature for now. However, the inexorable rise of first-time buyer house prices does suggest that the demand for such properties is still outstripping supply and the Government’s reticence to fully overhaul the planning system will not alleviate that crush.”
However, a recent survey by Your Move and Reeds Rains found that renting is becoming a longer-term option for increasing numbers of people.
Lack of available finances was cited as the key reason preventing people from buying, with 70% of respondents claiming that the inability to put down a deposit had hindered them from becoming a first-time buyer. Moreover, over 60% of first-time buyersadmit to having to rely on some form of financial support when buying their first property.
13.1% said that they will probably never be able to own their own home, up from 11.0% twelve months ago.
Adrian Gill added:
“The younger generation have been disproportionately disadvantaged by the recession, with many stuck in lower paid roles, unable to progress their careers at the same pace as the previous generation. At the same time, savings rates have been stuck in the doldrums, meaning any money they have been able to put aside hasn’t been working hard for them. Saving for a deposit has become much more arduous. Rising prices have also pushed up the amount many need to save in the first place, adding insult to injury. This means many tenants trapped in rented homes during the recovery are still playing catch-up.
“For many, homeownership is more of an aspiration than a concrete objective. Yet it may not be as difficult a dream to realise as many believe. Yes, rising house prices – and this month is no different in that sense – mean that the requisite mortgage becomes bigger, pushing up the amount of deposit a first-time buyer needs to put down. Yet there are a number of government schemes in place to ameliorate that problem, both Help-to-Buy schemes to start with. The uptake of these has been relatively low, suggesting that if tenants got more clued-up about the help available, that aspiration would be more likely to become an attainment.”
