First-Time Home Buyers Look To The Future

First-time buyers: they’re an increasingly rare breed and even when they do manage to save sufficient capital for a deposit, together with the level of wages they need to meet mortgage repayments, it’s a fairly safe bet that they will have had significant help from the Bank of Mum and Dad, have recently inherited a reasonable sum, or they are investing in a part-buy home.

Yes, unless you are buy-to-let investor, it’s getting harder and harder to get a mortgage, and in 2016 this was evidenced in the fact that for the first time since 2011 the number of first-time buyers actually fell.

But this should come as little surprise when you consider the fact that the average first-time buyer now needs a $30,000 deposit to have any hope of getting a foothold on the property ladder – up by nearly $4,000 on the previous year’s figure. But this number, derived from a study by Halifax, is only a fraction of the $90,000 first-time buyers in London need to find if they are to get a mortgage, so spare a thought for young families in the capital.

Of course, the difficulty faced by prospective first-time buyers is not only an economic one. For many years now politicians, think tanks, journalists, property developers and would-be buyers themselves have all been saying that the only way to address the issues facing first-time buyers is to build more properties.

But even this is no “magic wand” solution. Even if enough houses are built there is always a risk that this might only provide further fuel to the buy-to-let boom.

It is though, worth remembering, that some fortunate people have had success in getting on the property ladder. Despite all the doom and gloom Halifax estimates that last year more than 300,000 still succeeded in taking the first steps onto the property ladder – however tentative, however partial and however assisted by the Bank of Mum and Dad.

It’s nice to know (or hope, at the very least) that a fair portion of these first-time buyers were young families with young children and to feel that we still live in an age when every young family can feel the thrill and security that comes with home ownership – after all, if they say that computers are changing our brains, surely being a member of Generation Rent, with all the dependency, uncertainty, insecurity and short-termism which that provokes, has just as profound an impact on the human being’s core processor.

It is also worth remembering that things could be worse for the first-time buyer. The past few years have seen a relatively clement economic climate, low mortgage rates and rises in both the employment rate and average rates of pay. There are also plenty of lenders out there, including some who are not just the usual suspects.

So, our advice to first-time buyers, renters, and ‘my home is my castle’ dreamers, is… don’t despair – the deals are out there. You might have to fulfil some criteria and bow to the conventions of a government scheme, but it could just help you wedge your foot in the proverbial homeowner’s door and this, no matter what, is nothing to be sniffed at.

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