Recent statistics revealed by the National Association of Estate Agents has shown a decline in the number of 18-30 year-olds buying homes. This is down to 3% of the total number of homebuyers, compared to 12% a year ago. But why has this figure dropped?
It seems that, while mortgage repayments are relatively affordable, the tighter regulations (named MMR) introduced in May mean that it’s now slightly harder to access a loan.
Combined with the threat of interest rate increases, it appears that twenty-somethings are now thinking hard before stretching themselves to step onto the property ladder.
Figures from Halifax reveal that an average UK home price is 4.89 times more than the typical wage – this is an increase from 4.54 a year ago. The average since 1983 is 4.11 times more, with a low in 1995 of 3.09.
Nationwide has published data based only on first-time buyers, suggesting that the prices-to-wages ratio is now 4.9, up from 4.4 last year. Nationwide also revealed that the proportion of income first-time buyers spend on their mortgage repayments stands at 33.2% – a figure that’s hardly moved in recent years, despite the increased property prices. This is due to the falling mortgage rates, helped by the Government’s Funding for Lending Scheme.
Are you in the 18-30 age bracket and, if so, what’s stopping you buying your first home?