Member Article

Young people will wait longer to buy property

The average age of a first time buyer is likely to increase to late 30’s, according to PwC.

In their UK Economic Outlook report for July 2012, they predict that the UK housing market is likely to remain relatively flat in the short-term whilst in the long-term the house price to earnings ratio is likely to remain high as a result of housing supply shortages.

This trend is likely to continue meaning that without financial assistance, house ownership will realistically only be likely in a single young person’s late 30’s and mid 30’s for a couple.

The availablility of mortgages with 5% and 10% deposit makes ownership before 30 a realistic option but according to the report, these products are unlikely to be available to first time buyers in the future.

The ONS family spending survey reveals thats households headed by people under 30 years old saved on average £4.30 a week in 2008. This is equivalent to around 1.2% of median income at age 22, showing that in reality most young households save nothing like 5% of their income.

Recent research from the Council of Mortage Lenders found that around 80% of 18-24 year olds would prefer to own a house in ten years time but for most people this will simply not be an option.

Stephen Noakes, Mortgage Director at Halifax still believes that first time buyers should not be deterred: “Despite the launch of various initiatives to support first time buyers such as NewBuy, both young people and their parents share a view that it is difficult, or even impossible, for first time buyers to get a mortgage, which this is clearly a point we need to continue to address. The reality is we continue to approve eight out of 10 first time buyer applications, more than double the amount that people expect us to.”

This was posted in Bdaily's Members' News section by Lisa Johnson .