The rising cost of food and fuel could see over one million first time buyers put their plans to buy a property on hold. With high interest rates, difficulty in obtaining a mortgage as well as a higher cost of living, more young people are deferring their decisions to make a home purchase. First timers are waiting on average five years to buy a property. The average age of a buyer was 32 in 2020, but the age has now risen alongside property prices.
What is the current state of the property market?
In December, Nationwide reported an annual price growth drop to 4.4 per cent ,with the average cost of a home in the UK standing at £263,788. The building society’s latest House Price Index survey showed that the annual rise in house prices in the year to November was 4.4 per cent which was a steep drop from the 7.2 per cent recorded in the 12 months to October. Month on month, prices fell by around 1.4%. The previous largest fall was in June 2020, when the UK was in the middle of battling the coronavirus pandemic.
A new survey from Aviva found that 46 per cent of those under the age of 45 were not currently looking for a house. A further 16 per cent surveyed said they had no intention of buying. One fifth said the cost-of-living crisis made buying a house unaffordable. The survey also demonstrated that costly mortgages are dissuading people from getting onto the property ladder. Respondents planning to make a purchase or who are in the process of buying their first home say they expect to pay just under £200,000 on average, with an estimated £25,210 deposit. Respondents would expect to pay around £718 per month.
What is a realistic figure for mortgage repayments?
The respondents’ estimations were below reality, however, as when the figures were put into an online mortgage calculator, they were higher than expected. Recent results show a new homebuyer will be paying around £1,100 per month on a two-year fixed mortgage. According to The Guardian first-time buyers held back on buying following the rise in mortgage costs after the mini-budget.
However, the property market is set to remain reasonably buoyant moving forward. First time buyers wanting to make the move onto the property ladder can take advantage of the professional services that firms such as Parachute Law Ascot solicitors offer, taking care of the paperwork and ensuring your move is as smooth as possible. Moving home is a stressful process, with the average British person moving four times in their life. From Aberdeen to Ascot solicitors offer vital assistance with the legal aspects of buying a property. Buyers should contact a solicitor or conveyancer early in the process.
What role does family play in helping first-time buyers?
Close-knit families often rely on intergenerational giving. The survey showed that 12 percent of respondents said they would expect a gift or loan from their parents to assist with rising home-buying costs. Only four per cent of people said they would expect a monetary gift or loan from a grandparent. Among those aged 18 to 24, fifteen percent say their parents would go the extra mile and help them with home purchasing costs.