First time buyers require ten times higher deposit than buying in the 1980s
National Housing Federation (NHF) says first time buyers now need 10 times the deposit when compared to buying in the early 1980s.
Home ownership in the UK is becoming an "exclusive members' club" according to the NHF and that two-thirds of first time buyers need financial help from their parents, the figure doubling in the past five years.
First time buyers now need to a deposit of £30,000 and a mortgage from a lender of 3.4 times their income compared to the average in 1979 of only 1.7 times their income.
Home ownership for the wealthy
The NHF provides 2.5 million homes for 5 million people and they say that first time buyers must now earn more, have a bigger mortgage, a larger deposit and depend on their family to buy their first home.If current trends continue, only the wealthiest buyers in the next generation can afford to become homeowners.
Help for first time buyers can come from family members as the equity release buyer can access money using a lifetime mortgage for the deposit on their first home.
Without family help to upsize, the only option for some remortgage buyers to stay in their existing home and continue saving more for a bigger deposit.
In a recent poll conducted for the NHF show that 80% of people in England believe it is harder to buy a home than in their parents generation and that the government would not be able to deal with the housing problem.
According to the NHF the housing crisis can be solved and requires a bold long-term government plan for new build homes.
House prices still rising
Rightmove has conducted a survey showing that property prices have increased by 0.9% in September for the first time since 2011.Over the past 10 years house prices have typically fallen in September by 0.5% on average as home movers and first time buyers return from holiday.
It also says that enquiries to agents are higher by 16% year on year and is the second highest month on record.
Without family help to upsize, the only option is for home movers is to stay in their existing home and continue saving more for a bigger deposit.
Even so, other reports this month from Halifax and the Royal Institution of Chartered Surveyors (RICS) show that the housing market is slowing.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even gift to a family member or friend.
Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
Mortgage Best Buys
These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.
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Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.
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