Affordability Remains 'Major Issue' For First Time Buyers
37149
Finance > Personal Finance
Aug 16, 2007
Steve_Smith
Affordability Remains 'Major Issue' For First Time Buyers
First-time buyers' views on the property market have changed dramatically over the last 30 years, a new set of figures have intimated. According to research carried out by GE Money Home Lending, the average age of a buyer taking their first steps on the housing ladder has risen from 27 in 1977 to 34 in the present day. The study also revealed house price inflation has grown by some 1,436 per cent during this stretch of time. As a result, some three-quarters (76 per cent) of consumers surveyed claim that it is currently the worst-ever period for first-time buyers to afford the costs of purchasing their own home. Meanwhile, the typical homeowner is now revealed to be contributing about 25 per cent of their annual income towards making repayments on secured loans. Gerry Bell, head of mortgage marketing for GE Money Home Lending, said: "The fact that taking the first step on to the property ladder now occurs later in life is due in no small part to economic factors such as house prices. However, our analysis also reveals that today's potential younger buyers also have vastly different attitudes, aspirations and lifestyles to their counterparts 30 years ago. This refusal to conform to traditional family-oriented motivations and the desire to gain independence and experience, undoubtedly delays the purchase of a first home and contributes to the ongoing affordability issues faced by these consumers." Research from the financial services firm also showed a change in the reasons for why consumers are making their initial forays on the property sector. Thirty years ago more than half of first-time buyers claimed that their main reason for purchasing a home was due to their recent marriage. However, this figure has now fallen to 14 per cent. The study showed that the majority of consumers are now looking to buy a property as they want a home that they can call their own. Meanwhile, a change has been noted in the status of property purchasers. In 1977, the vast majority (80 per cent) of buyers were married couples, something that has now decreased to a third. Findings from GE Money Home Lending also showed that about a quarter of first-time buyers currently purchase a home on their own - almost double the proportion that did in 1977. In addition, the study revealed that just over half (51 per cent) of all first-time buyers are currently receiving some sort of financial help from either their parents or grandparents in meeting property costs. "Affordability is clearly a major issue and an issue which is here to stay, as house prices continue to create the biggest challenge for future first-time buyers," Mr Bell added. Towards the end of last year, a survey conducted by Scottish Widows unveiled a rising difficulty among university graduates in getting on to the property ladder. According to the financial services provider, 56 per cent of consumers completing university are yet to buy their first home - a rise of three per cent from last year's study. Some 70 per cent of those yet to purchase a house claimed that increasing property and secured loans costs were the main factor in preventing them from doing so.
Steve Smith writes for 1 Stop Finance Shop, a one stop, Personal Loans Shop, with information on bad credit loans and debt consolidation loans available on site.
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