Long Wait for England’s first time home buyers.

on Jan 22, 2015

A report conducted by data analysis company Liverpool Economics has revealed some harsh statistics regarding the difficulties facing first time property buyers across England. The report, commissioned by the charity Shelter, found that young couples in some parts of England may need to save for at least 6 years before they can afford a deposit of 20%, which is the amount most favored by banks when considering first time mortgage applicants.

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The case for a similar couple living in London is even more challenging. The report shows that increased prices for residential property mean that a couple with combined earnings of over 50k, must wait over 13 years before having sufficient funds for a 20% deposit.
Predictably the cost of living in London is a major mitigating obstacle when considering a young couples ability to save a proportion of their income. Even though London wages are often of a higher level when compared with the rest of the country, the difference is rarely sufficient to offset the increased cost of living in London itself.

Shelter did point out that a concerning factor highlighted in the report was that a couple with a child faced a substantially longer saving period than those without, over 25 years for couples in London for example. The concern is, as Shelter pointed out, that when faced with such financial challenges, the decision to start a family essentially boils down to money and affordability.

Commenting on the report’s findings Campbell Robb, CEO of Shelter said,

“Home ownership used to be within most people’s reach but the rising shortage of affordable homes has pushed house prices up so high that for millions of young people it’s now just a fantasy. Successive governments have announced scheme after scheme promising to help first-time buyers, but these have just papered over the cracks.”
While such statistics will be of obvious concern to young couples looking to get on the property ladder, they will likely be viewed as favourable economic conditions for stakeholders in the buy-to-let property market. Increased restriction on home ownership for younger generations means more renters.


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