First Time Home Buyers’ Situation Worsens

The Home Builders Federation came out with a report this week saying that first time buyers (FTBs) in their 20s now have to save 45 per cent of their net income every month for five years before they can afford the deposit for an average property.

In London and the southeast, the situation is even worse, with young people having to save 60 per cent of their income. As a result, the average age of the unassisted FTB has now gone up to 37. And it means that almost a third of men and a fifth of women aged between 20 and 34 remain living with their parents.

Stewart Baseley, executive chairman of the Home Builders Federation, said: “These figures reveal the extent of our housing crisis. First-time buyers - the life-blood of the housing market - are almost entirely shut out. The lack of mortgage availability is further strangling a market already choking on a lack of supply. We desperately need an increase in lending and a properly functioning and sustainable mortgage market.”

The report reveals that in 2009 the supply of new homes was the lowest since 1924, which combined with the lack of mortgage availability has pushed FTBs into yet more difficulties.

If you go to France or the Netherlands for example, the proportion of people renting is far higher and there is not the same stigma attached to it. So it may be that the British obsession with home ownership has gone a bit too far, and extending the rental class is no bad thing.

Certainly you can argue that home ownership contributed to the massive rise in household borrowing, as people took out loans against the value of their property which they would otherwise never have been able to afford.

Original comment can be found at Quick House Sale Blog

via Posterize