If you’re a first time buyer, getting onto the property ladder can be a daunting prospect. The number of first time buyers in the UK has fallen sharply in recent months, we take a look at some of the reasons why first time buyers are struggling to find a new home: -
1. House Prices
The average home is the UK has rose to more than 200k. Many first time buyers do not have a realistic view of the current state of the housing market and have unrealistic expectations as to what is available to them based on their budgets.
2. Deposits
Due to market conditions, a healthy deposit is crucial when applying for a new home loan. Many young individuals do not have the financial resource to offer the required deposit amount.
3. Debt
The current level of personal debt amongst new buyers is restricting the ability to save. Lack of savings usually means lack of deposit.
4. Job Security
A home loan for a first time buyer is likely to be sizeable, the larger the loan, the larger the repayments. The average monthly repayment for first time buyers is around the £600 mark with the average loan duration being 25 years. Coupled with job security, many new buyers are put off by such a large commitment.
The government now offers various schemes for new buyers to purchase a new home in the form of part ownership. However, some buyers are deterred by such schemes for feelings that they do not truly own the property.
The general consensus is that eventually something has to give. There has recently been evidence to suggest a slowdown in the housing market but whether it will continue or be enough to help first time buyers, remains to be seen.
