FTBs need house price collapse
Many young people are still struggling to get onto the UK property ladder at the current time because of the fact that house prices are still high, meaning they have to save a substantial deposit.
This has led to one expert claiming that the only way more first-timers will be able to purchase their own properties for sale in the next few years in any sort of significant number will be if there is a collapse in prices which leads to housing becoming more affordable.
Earlier this week, Rightmove reported that the number of prospective first-time buyers across the UK was at its highest level for over three years. The company said that three in ten people who are looking to purchase over the course of the next 12 months will be buying a home for the first time.
Paul Holmes, chief executive at Firstrung, said though that recent figures have been skewed, and that there is no way that it is becoming easier for young people to get onto the housing ladder.
"The only way that first-time buyers would find it easier to get on the first rung would be if house prices collapsed. But then the paradox with that is that if prices collapsed then it means that the economy really has gone to hell in a handcart and that some first-time buyers are unlikely to have a job," he said.
Mr Holmes went on to add that it is getting increasingly difficult for first timers to buy because of the fact that house prices have not moved in recent years, and this has led to a static situation whereby mortgage lenders are still seeking a 20 to 25 per cent mortgage on any home purchase, making it almost impossible for them to be able to afford to purchase.
Earlier this week, the Post Office reported that young men in the UK are only confident of saving up 18 per cent of the price of a home for a deposit if they really had to, while their female counterparts said that they would only be able to raise 16 per cent.
Posted at 05:08 03/07/2012