First Time Buyers, Long-Term Criers.
An increasing number of young adults are being coerced into renting as a long-term living solution as opposed to buying their own home. But this has taken some people by surprise because house prices are stabilising, right? Sure, but that does not mean they are yet decreasing. Money is still an issue for most buyers, which is why the Bank of Mom and Dad is set to spend 23% more on their offspring, just to get them on the property ladder. That will take parent’s involvement up to £6.5 billion in 2017.
So, why aren’t house prices decreasing yet? In one word…demand. There are now 10 buyers for every property across England and Wales, and with more competition, it makes each one of them more willing to meet the asking price. It would therefore be illogical for sellers to lower their prices when buyers are going to be putting pressure on each other to bump up their agreed amount. A 10% deposit for a Birmingham property is, on average, £17,000, and it could take up to a decade to save that kind of sum. This means that the average age of first time buyers is now up to 31.
So how can first timers find help on getting their feet on the property ladder?
Help, Help, Help.
If you need a little assistance and the Bank of Mom and Dad is not an available – or the right – option for you, you need to look elsewhere.
Help to Buy is a government scheme that helps first time buyers get onto the property ladder. They offer more than one way to do this too, so make sure to visit their website and decide on the best support for you.
- ISA – The ISA is a saving account letting first time buyers save for a deposit tax free. The government will also give you a boost, known as a bonus, depending on how much you have in your account. This will only start after you have hit a certain amount, and the maximum you receive is around £3000 – but, just like how any penny can complete the pound, any hundred could make the deposit. But make it snappy, because this life line from Help to Buy is only available until November 2019.
- Equity Scheme – This scheme provides a government loan of up to 20% towards a deposit where the buyer only puts in 5% of their own.
If those options also do not appeal to you, you could consider a shared ownership. This essentially means you buy a share of a property (somewhere from 25% to 75%), merely paying rent on what is remaining. However, you need to be careful with this route, since this deal will cause problems when it comes to selling the property.
We have also published some articles on mortgages in the past, which you may find contains some useful information. To find it, read out blog; www.enlightenea.co.uk/blog.