Nearly one-third of people – six million – who are currently not home owners never intend to buy a property.
Furthermore, those who do plan to step on the home ownership ladder expect to do so at the age of 38.
Moneysupermarket.com, which did the research, points out that the number of mortgage products available to first-time buyers currently stands at just 1,581, a fraction of the 14,940 available in July 2007.
This is despite that the fact that the number of first-time buyer products available has risen by almost 200, while there has also been a 47% increase in the number of mortgages available up to 90% LTV.
Clare Francis, spokesperson at moneysupermarket.com, said: “The housing market has been hugely affected by the credit crunch and economic downturn, and first-time buyers have been hit the hardest.
“It’s easy to see why nearly a third of non-home owners do not intend to set foot on the property ladder. House prices may have fallen in many areas but they are still high. This, coupled with the need for such a high cash deposit, is pushing many people out of the market.
“There is still limited choice if you have a deposit of less than 10%, and the rates on these mortgages are around 5.3%, which is significantly higher than the most competitive rates. This also means that the monthly repayments first-time buyers face are often higher than for those who have larger deposits to put down.”
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Comments
There are also lots of "ways" to save money, as well as lots of "waves"!
Of course, when the goal posts are moved, it is hard. No doubt about it. Those that make their money work for them will get there in the end. Progress is often a slow process and patience is essential...like most things.
Anyway, I would hope everyone (After 4 years) would want to have £10k and be £10k short, than have nothing and be £20k short.
I knew a guy who worked at the local Waitrose every Sunday (on top of a full time job). The Waitrose money was purely for saving. Granted, it was double pay at the time, so this earnt him an extra £300 per month.
There are lots of waves to save money (as well as saving money by cutting costs). Even if a mortgage is still out of reach after 4/5 years, you'd rather have that De Niro behind you, than not.
I agree with everything you've said there AoS. One thought though - planning to save 10K over four years assumes that the figure you need for a deposit in four years time hasn't changed. Imagine saving 2.5K the first year and then realising house prices have increased over the last 12 months so you need 12.5K for a deposit. After a year of saving, you still have to find the original 10K you started working towards. So, do you keep trying to save 2.5K a year and save over five years instead of four? Or do you try to increase the rate you are saving? Next year house prices go up again.
Watching the goal posts move like this year after year is incredibly demotivating and has certainly fostered a 'What's the point in even bothering to try' attitude among younger people when it comes to saving for a deposit.
Just picked up on your dual between the two of you.
I was listening to News Beat on Radio One last night, they covered this for a few minutes.
The 'play' on the report was along the lines of what Rant has just said - people can't physically afford to save.
There was one 27 year old chap who lived at home with his parents and needed a £10k deposit. He said it was "impossible" for him to get this, so he has "given up" trying to save. If he just saved £200 per month, he wouldn't be far off £10k in 4 years. If you are living at home and still can't afford to save this money, how will you ever be able to afford a mortgage, regardless of a crash or no crash?
It all starts with pocket money at 5 years old. You have to learn and appreciate the value of money. Those that do, have some sort of savings behind them when they get to their mid-20s. This could be hundreds or a few thousand, but this mindset is key.
One hate I have is towards those that have not saved, got their own flat/house with their mates, lovely new cars on HP, lived the high life and not saved. Today they are 25+ with no savings and complain at how hard it is to get a mortgage and that prices are too high.
I, too, have you friends who were struggling to put money away. They made some changes to make themselves better off. Renting a double room for £300 per month as opposed to renting a flat between two for £500 each. Guess whats he's doing with that extra £200 per month. Car sharing to work, changes to the shopping list and like PeeBee said, changed the phone contract from £40 per month to a sim free deal @ £15.
There really are ways to be saving money. I don't feel for those who have not even considered 'tomorrow' while investing all their time, effort and finance in 'living it up today'.
PeeBee - Youngish folk I know aren't saving for a deposit because they haven't had a pay rise in three years and the cost of essentials like fuel and food is rocketing.
rant - thanks for that. I will have to get more inventive in future to blame you for forthcoming booms! ;o)
EXCEPT, of course, the imminent boom for fruit-pickers! I reckon experienced British fruit-pickers will be able to name their price now - they'll be earning more than plumbers (no pun intended...well, maybe a little one...)!
Anyway - back (sort of...) to the subject. You will no doubt have seen the Halifax survey, rant. Some of the more militant HPCers will have no doubt got really excited about it (pity, really - as the message is so bleak...) but it states that two thirds of non-homeowners doubt that they will ever own a property. That's sad.
But here's the thing. According to the report, the perception that banks are not lending, the size of mortgage deposits necessary, and a fear of the application process has prevented young people from making any significant attempts to buy a home. Only 5 per cent of the survey group were making sacrifices to save for a deposit, and 95 per cent say they have no spare cash or no interest in saving for a deposit.
NO SPARE CASH?? NO INTEREST?? Come on - with this sort of attitude is it a wonder that banks are reluctant to lend?
Dump the mobile phone - there's £35 a month. One night a month staying in at the weekend - how much will that save - fifty quid? A hundred, maybe?
rant, mate - these people are doing your cause NO favours. Judging by the above, lower prices will help NO-ONE as the majority are too busy living it up to put their priorities in the right order!
Or is it just that the representative sample was the cast of Geordie Shore?
PeeBee - Let no-one ever say your posts are uninspiring...
Veering off-topic, this May countries across the rest of the EU lowered the barriers to workers from the East that only the UK and one or two others hadn't put up.
So now, a skilled Pole, Hungarian etc can seek employment anywhere. They could go to the UK which is a couple of hours' flight away, where rental options are some of the priciest in the EU and jobs are currently scarce. Or, they could drive next door to Germany, be close to their family, enjoy some of West Europe's cheapest housing and snap up a job in a country with low unemployment.
Seems like a no-brainer really. Sorry Pee Bee, I've just ruined the boom you think I created!
rant - rather than bash you over the head I'd much prefer to shake your hand one day! ;o)
You and Sibley's... are my ongoing projects! Work in progress, you might say...
I've done all I can with Brit1234. He is all show & no blow as far as I am concerned - I can't win 'em all.
So... back to the debate. I am not sure that the article does hint at what you say. Depends how you read it, I suppose - like I proved a few posts somewhere below.
Maybe Slovakian fruit-pickers is a market yet to be exploited by certain Agents? By combining incomes, eight or nine of these industrious individuals may well be able to afford a three bedder in some locations - who knows! Then there's footballers looking for s**g-pads in quiet hamlets away from the paps and Tw@tterers - another niche market ripe for exploitation! Now this one of course causes the most controversy - do you build them a communal block that would, in most instances, be thought of as a kn*cking shop - or is it that you take a standing semi (NO pun intended... well...maybe a little ;o) ) and convert it for the required purpose.
Oh... hang on a minute - that would be competition for the Slovaks. More demand than supply.
DARN IT! Just created the next boom!
YOUR fault, rant! ;o)
Pee Bee - seems like everyone else has lost the will to debate these issues. I always knew it would come down to just the two of us bashing each other over the head...
Not sure if I get your point? Supply and demand - definitely. This article seems to suggest demand is in for a serious reduction. Economics 101 - what happens to prices next? It is not quite that simple, but I still think the question is worth asking.
Another related thought that you (or rather YOU) might have a view on. The Boomer generation are so called because there are more of them in that age-group than those born before or after. So, aren't Boomers wishing to downsize looking at a smaller demographic of buyers already? For what it's worth, I am not expecting Slovakian fruitpickers to pick up the slack in demand for three-bed semis!
rantnrave - hang on a cotton pickin' minute!! What happened to supply and demand matey?
You know - our USUAL measure of market strength (or in your words, weakness...)!
HPCers crow when supply rises that it is proof of impending doom as the demand is so much lower.
There is NEVER equilibrium, as you well know. That would be too easy (and wouldn't suit HPC purposes either!)
I'm sure you'll correct me if I'm wrong Pee Bee (you usually do) but I understand that there are two sides to a market - buyers and sellers. A significant drop in the number of buyers would mean either sellers have to exit the market themselves or compete more for those who do want to buy. The housing market is of course more complicated, but hopefully you'll get what I'm suggesting here.
Why would that be, rant?
I wonder if there are a correspondingly six million people now not planning to sell their home?
"Nearly one-third of people – six million – who are currently not home owners never intend to buy a property."
FANTASTIC news then, for Agents and vendors alike. Read it again, and it says:
"TWELVE MILLION people who are not currently home owners DO INTEND TO BUY a property!"
Add those to those who currently own and will no doubt move upwards, downwards or sideways, and that is the next twenty years' supply of homes for the Land Reg stats...
A cup is always full of something... ;o)
peebee: yep, shame on them, very greedy and foolish.
I'm just glad to be making money out of banking and not the other way round.
Backspin: "Working for an Investment bank, I know whats coming..."
What a pity NONE of your colleagues ever seem to...
I like renting because my landlord is very fair and the monthly cost is cheaper than buying. He must have spent 2K in the last year on boiler repairs and maintenance. This year we are getting new carpets and the walls replastered plus can decorate in our own choice of colours. To buy the house we would need 60K deposit and the rent from the bank would be £200 a month more... so why buy, no point at all. Instead we are watching our deposit (gold & silver) return 30% a year for the last 6 years, flourish and will buy for cash in a few years time. I would hate to see the bank make money out of me, once interest is paid, the cost of the house is nearly double. Working for an Investment bank, I know whats coming and would be scared to death if I had a mortgage right now. Long live the landlord !!!
If first time buyers are only buying at 38 and last year they were reported to only be buying at 39, what has happened to the FTBs who were 38 last year but are 39 now? Are they lost forever?
Perhaps moneysupermarket.com need to look into this urgent problem and stop commissioning pointless surveys.
...as long as ppl can afford to rent...if not, more social housing/homeless
Well that will keep the lettings on the up.
Its because they are not yet in the country.
16m don't onw, so does that mean we have circa 40 mill home owners? numbers don't seem to stack up.
“It’s easy to see why nearly a third of non-home owners do not intend to set foot on the property ladder. House prices may have fallen in many areas but they are still high...way too high.