Homeownership Continues To Fall
Most people living in the UK aspire to own their own home at some point in their lives, even if this has a home owner loan or mortgage attached to it. But the latest survey from the Council of Mortgage Lenders (CML) has shown that home ownership is on the decrease as many individuals simply can not afford to get onto the housing ladder.
Although the average cost of a house has dropped by around 20 per cent since the start of the credit crunch, the cost of a new loan has become unaffordable for many would be first time buyers, due to tighter lending criteria and reduced loan to value ratios from banks and building societies.
In order to get the loan they require to buy a house, the average first time buyer is now having to find somewhere in the region of £34,000 as a deposit, which in many cases is far more than their annual gross salary.
As a result of this, a growing number of potential first time buyers are seeking financial help from their parents in raising sufficient deposit and even with the home owner loan repayments.
In 2006, approximately 38 per cent of first time buyers sought financial help from their parents to get the loan they needed. In 1996 this figure was just 10 per cent, but prior to the credit crunch this had risen to 45 per cent and now the CML estimate that around 80 per cent of all first time buyers are receiving some kind of help with their loan, or house purchase.
It is hardly surprising therefore, that the average age of a first time buyer has risen significantly over the past few years and the number of individuals who are able to buy a house and get a home owner loan between the ages of 25 and 34 has fallen to half the number from ten years ago.
