The housing market has been pretty tough to break into for first time buyers in recent years. Securing a mortgage requires quite a significant deposit these days – something many people struggle to raise due to the high cost of living. There has also been an increase in the number of self-employed, meaning actually getting a mortgage is proving to be much more difficult.
Here, we’ll look at the average age of first-time buyers, along with the services available to make it easier to get onto the property ladder.
Average age of first-time buyers has increased
A recent survey has revealed that the average age of first-time buyers has risen by seven years since the 1960’s. Perhaps most shockingly, was the fact that the average deposit needed was around £595, the equivalent of £12,738 in today’s money. When you compare that to the average £20,000 needed to secure a deposit in today’s market, you can see just how much prices have risen.
In the 1960’s, first-time buyers were on average, 23 years old. Today however, the majority of first-time buyers are 30 years or older.
Tougher crackdowns on buy-to-let landlords have improved the market
One thing which has improved the market recently, has been the crackdown on buy-to-let landlords. As fewer investors are now focusing on the buy-to-let market, it’s given first-time buyers more choice of smaller, two-bedroom properties. The cost of these types of properties has also decreased by 0.1%.
It is thought that the changes to buy-to-let income tax and the 3% stamp duty charged on second properties, has put off many investors, paving the way for first-time buyers instead.
What services are available to help?
For those looking to break into the housing market, there is help available. The Help to Buy Scheme where the government provides up to 20% of the cost of a new home, is one of the best opportunities for first-time buyers. It means you’ll only need a 5% deposit. The latest reduction in stamp duty announced in the 2018 budget, will also help some first-time buyers, particularly in London. So, help is available to ensure younger people can get onto the property ladder.
So, it may be more difficult to get onto the property ladder now compared to the 1960’s. However, help is available for first-time buyers and the government is still yet to launch the much-anticipated Starter Homes Initiative which would provide a discount of at least 20% for first-time buyers.