A new survey by Money Supermarket has found that 8 million people in the UK are currently priced out of the housing market, with most first time buyers accepting the reality that they will be long-term renters while saving up a sufficient deposit.
The survey found that 40% of potential UK home-buyers are prepared to rent for a considerable amount of time while saving up to buy. With research now indicating that 37 is the average age we will buy our first property, this could be quite some time.
But this is hardly surprising, while the number of 10% deposit mortgages has increased by 20% over last year to 209 products, this is still much lower than is needed. In fact, the average LTV of mortgages available to first time buyers is 78%, which leaves first time buyers having to find £33,000 on a home worth £150,000. which is totally out of reach for most first time buyers. Heck, with the average house price at £161,000 according to the Land Registry even a 10% deposit of around £16,000 is a big ask in today's economy.
"Home ownership is a really big thing here in the UK. For years it has been something millions of people aspire to and therefore it's surprising to see that this may be changing and that some people are giving up on the hope of ever owning their own home,’ said Clare Francis, mortgage spokesperson at Moneysupermarket."
"To a certain degree it is perhaps understandable. Despite a stagnant housing market in many areas of the country, property prices remain exceptionally high. Coupled with this, mortgages remain hard to come by with the number of loans available to those with a small deposit well down on the pre credit crunch days. Rising living costs are also making it harder for aspiring first time buyers to save that all important deposit," she added.
- Friday 27 April 2012