Fewer than one in three potential first-time buyers believe they will be helped to get on to the property ladder by the Help to Buy scheme.
More than one third (34%) said they would still struggle to get a mortgage and over one in ten (12%) said they would find a 5% deposit difficult to save for. Nearly a quarter (24%) were unsure if the scheme, which will make 95% mortgages widely available from next January, will help.
The findings are in a MoneySupermarket survey which also found that 35% of non-home owners think they will never be able to buy their own home. This time a year ago, the proportion was 41%, suggesting that first-time buyers are more hopeful.
Those who believe they will get on to the housing ladder estimate they will be 37 years old when they buy their first home.
This increases to 38 for those looking to buy in London, while those in Yorkshire and Humberside believe they will manage to get a foot on the housing ladder by 34. North of the border, Scots will be 42 on average before they buy their first property, underlining the fact that only a third of those in Scotland (30%) intend to buy their own home compared to 61% of Londoners and 45% nationally.
The MoneySupermarket analysis revealed that the number of overall mortgage products available to first-time buyers is currently 1,565 – up 17% on this time last year, while the average rate on first-time buyer mortgages has dropped 0.59% year-on-year.
However, the average LTV is now 76% for first-time buyers, down from 78% this time a year ago. This means someone taking out a mortgage on a £150,000 property would need a deposit of £36,000, an extra £3,000 compared with last year.
For those seeking a 90% LTV mortgage, the number of mortgages available has fallen by 13%, although the average rate for these products has fallen by 0.52% since April 2012.
Clare Francis, mortgage spokesperson at MoneySupermarket.com said: “Home ownership is something millions of people aspire to, so it’s encouraging to see an increase in the number of people who hope to one day own their own home, even though it may feel a long way off for many.
“The Funding for Lending scheme has provided a real boost for the mortgage market in terms of the number of products available. However, the main beneficiaries are those with large deposits, so it is understandable that so many aspiring home owners still think it’s going to be difficult to get on to the property ladder.
“And even though the Government’s new Help to Buy initiative is aimed at giving help to these people, it is evident that many are sceptical that it will make a significant difference.”
Meanwhile, separate research for the Council of Mortgage Lenders shows that home ownership, not renting, is still the ultimate lifestyle choice for most. See next story.
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Comments
Dear cap in hand, I do have a family but don't receive any benefits, thanks for the concern you show though
Happy, getting worried about your benefits cap, is the writing on the wall for you and your big family.........................
Tony, but It does become a problem for the politicians when significant amounts of the population cannot afford to buy or rent.
Yes, anyone incapable of saving a 5% deposit should not be called a FTB in the first place: there have always been millions of such people, and they've stuck to renting either in the private sector or from a council or housing association.
We seem to be in a ridiculous media-driven world in which it is somehow the entitlement of everyone, no matter how poor or low-income, to "own their own home", and if someone somewhere cannot afford to buy, this is meant to be a problem for our politicians and bankers to solve
It's a pity Britain hasn't got talent in Downing Street, hasn't got talent in Westminster, hasn't got talent at the Bank of England, hasn't got talent at the top of the NHS, hasn't got talent at Ofgem, hasn't got talent at Ofwat, never had talent at the FSA. In fact, all we have at our key institutions is incompetence and greed.
It didn't bother these people
http://www.dyslexia.com/famous.htm
So no it doesn't bother me.
It doesn't wind me up chappy. The fact that you can barely string a sentence together should be your problem. Don't you think?
So, I think what you are all trying to say is the HTB scheme will only help those that are eligible to get mortgage, have a 5% deposit but cannot or are unwilling to save for a higher deposit.
You all also seem to be saying, that anybody who cannot save up a 5% deposit can be disregarded as potential transaction.
It would seems more people can be added to that group why?
Well with the average first time buyers age being 37
The requirement for the type of house for the potential FTB has changed, (the traditional starter home is now no longer viable) Why? because someone aged 37 is likely to need a bigger property therefore they need to spend more than FTB'ers in the past,
However, because they are older they are unlikely to be living at home saving cash, (let's not mention interest rates not incentivising this)
Now the highest requirement for house transactions will be in the most densely populated area of the country is the south east, which conversely has the highest house prices, driven by rapid HPI but which has seen very low Wage Inflation
So you see saving a 5% deposit more difficult than it used to be because the affordability measures are worse
With affordability measures getting worse less people are eligible for mortgages due to the lending criteria of the banks
So what does this do for the old " it's all about supply and demand innit argument" seemingly that there will be less demand therefore less transactions,
So will HTB really stimulate demand???
I don’t know and I don’t care, but I hope the length of this post wound up my grammar teacher on here. :0)
Agreed with Kevin on this, if some said FTB cannot raise between £5000 and £10000 (I am not taking London price into account now) that is a 5% deposit on a first time house, well I don't think they can be considered a FTB
Not everyone who never owned a house is a FTB, you have to want it and try to make it happen.
I understand it can be hard and a long process (took me ages to raise my 10%) but buying a house is not a right, you have to work at it.
“over one in ten (12%) said they would find a 5% deposit difficult to save for. Nearly a quarter (24%) were unsure if the scheme, which will make 95% mortgages widely available from next January, will help.”
These people are not first-time buyers are they. They aren't buyers. They have no deposit and/or no mortgage, and therefore no intention or ability to buy.
I'm not interested in the buying opinions of non-buyers.
If someone was motivated to buy and went to see a financial or mortgage broker they might learn something, and get a mortgage.
There will be more buyers out there, simple as that. More people will have 5% than 10% obviously.
Another negative spin on a positive story.
LTB Scheme will not help a third of buyers but it will help the rest if they require the help.
Arguably there is probably a third of people who have not purchased their first home that are not suitable for home ownership.