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First Time Buyers – Pessimism and the Property Market

First Time Buyers – Pessimism and the Property Market

It’s long been a concern within the market that first-time buyers are struggling to get onto the property ladder. Mortgages aren’t as readily available as they were before the introduction of the Mortgage Market Review in 2014, and prices remain prohibitively high for many.


The effects have been twofold: first-time buyers are much older than previously, having taken longer to raise the capital required to purchase a home. Secondly, more pressure is placed on the rental sector, as those locked out of the sales market rely on rented properties until they can afford their own home. The root cause of all of this is, of course, the lack of affordable housing stock coming onto the market across the UK.


So what is the first-time buyer experience like at present? Research from the Clydesdale and Yorkshire Bank shows that 65 per cent of young homeowners were able to buy their property later than they had expected, with only 8 per cent of those surveyed answering that they had been able to buy earlier than they believed would be possible.


When the same survey was carried out in 2013 the figure was 68 per cent of first-time buyers who had faced delays raising capital and getting their purchase through. And of that 68 per cent, 17 per cent had faced delays of between one and two years.


And amongst those who will be looking to purchase a home in the near-future there is considerable pessimism. Evidence from The Building Societies Association survey on market perceptions suggests that around half of 25 to 34 year olds believe they will still be paying off their mortgage well into their retirement. And 27 per cent of those surveyed believed they will still be struggling to gain a mortgage when they hit retirement age owing to age and income.


Recent data on first-time buyer activity shows that this pessimism is having an impact on the market. Valuations performed for first-time buyers declined 4 per cent on an annual basis during May, according to Connells Survey and Valuation.


This is despite claims from the Government on the efficacy of the Help-To-Buy scheme. Official figures show that since its introduction in April 2013, the scheme has created 131 new homeowners a day. Of these 80 per cent have been first-time buyers, with a particularly large number of first-time buyers in Leeds, Birmingham, Wiltshire, and in County Durham.

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