Next in the English Housing Survey series: First-time buyers – is it really difficult to get on the housing ladder?

publication date: Aug 2, 2016
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

First-time buyers – is it really difficult to get on the housing ladder? 

We often read lots of stories about the ‘ageof the first-time buyer… so has it really increased? Yes, a bit!

In the last 20 years, the average age of FTBs had increased from 30 to 33. However, the latest data shows that perhaps some of this age increase was FTBs holding off buying during what has pretty much been a 10-year recession.

The latest years data from 2014-15 suggests that “the majority of first-time buyers were aged 25-34 years”, which is similar to the time of the last recession – which was 1994-1995.

Having said that, the number of 16-24 year olds buying has fallen from 23% to 10% as people buy later. And those aged 35-44 buying their first home have increased from 11% to 20%.

Most (80%) also have to buy as a couple to afford their first home these days.

Interestingly, older tenants are more positive about owning their own home in the future. From a social housing perspective this is likely to have increased because of the potential access to purchasing their home if they rent from a Housing Association (this scheme is currently in pilot stage).

There were more older social and private renters expecting to buy than in 2010-11.”

In the private rented sector, the proportion of 45-54 years olds expecting to buy
increased from 33% in 2010-11 to 48% in 2014-15.”

The bank of mum and dad is not a new phenomenon!
Interestingly, although incomes have increased for FTBs buying a home, it isnt that much. The report concludes:

Three-quarters (72%) of first-time buyers were in the fourth and fifth quintile income bands 2 in 2014-15,
up from 62% in 1994-95.”

However, as we are now third generation home owners and people are inheriting properties or money from properties, FTBs have much more help from the bank of mum and dad. But the increase may not be as much as you think – I was certainly surprised at these figures, considering the change is over a generation, ie 20 years.

Between 1994-95 and 2014-15, there was an increase in the proportion of first-time buyers that had help from friends and family (from 21% to 27%) and those that used inherited money (from 3% to 10%) for their deposit.”

From the headline we see, you’d think that pretty much every first-time buyer had help from mum and dad, but in fact 73% dont. It has fallen, but only from 79% who used to manage without parental help, so ‘bank of mum and dadis important, but not quite the level of support that many people are suggesting.

Looking to buy your first home? Read or FTB Quick Guide

Hooray for landlords! They do do a good job for some!
We also hear on a regular basis how horrible landlords are and what rubbish homes they supply. I dont agree with it and hate the them and uslandlord versus tenant attitude that is being created. Often landlords and tenants want the same thing.

Most tenants who are not expecting to buy cited affordability as the main reason, but it’s interesting that one in ten plan to rent long-term through choice:

A minority of households did not expect to purchase a home because they preferred their current circumstances as renters: they liked it where they were (9%) and/or preferred the flexibility of renting (1%)."

Could this be the start of a culture shift towards renting rather than buying?


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