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Flexibility is Key for First-Time Buyers

New research has revealed how flexibility and willingness to compromise are important for first-time buyers as they strive to take the first step on the property ladder.

Ability to Compromise

The study by Post Office Money looked at over 1,000 people who bought their first home in the last 24 months. They say compromise was key in making their property ownership goals a reality, with 70% choosing to buy a home an average of 26 minutes from their original ‘preferred’ location. Around 5% said they had to be flexible about having a suitable garden, 3% about the availability of car parking spaces, and 4% about taking on a property that needed some structural work.
 
“With average house price growth having increased by 48% since 2005, compared with an increase to the average FTB income of only 37% over the same period, there is no question that the UK housing market remains a challenging environment for many,” explained Owen Woodley, Managing Director, Post Office Money. “In spite of this we’re seeing that first-time buyers approach the market with enthusiasm and flexibility.”
 

Reasons for House Purchase

The biggest emotional drivers for first-time buyers’ home ownership ambitions include:
 
  • having met a partner and wanting to make a home together (24%)
  • wanting the security of a long-term place to live (21%)
  • wanting to move out of a parent’s/family’s property (16%)
  • feeling it was expected that they should own a home (15%)
 
Financial considerations also ranked highly, with 25% of respondents deciding to buy as they felt they were spending too much on rent and it wasn’t a good investment, and 23% feeling ready as they had enough savings to put against a deposit. In addition, 18% saw investing in property as the best investment of their money long term.
 

House Price Growth Slows

Affordability continues to be one of the main obstacles facing first-time buyers, although house price growth does appear to have slowed down in recent months.
 
The latest House Price Index from Halifax found that prices in the last three months (May-July) were 0.2% lower than in the previous three months (February-April), which is apparently the fourth successive quarterly fall; the first time this has happened since November 2012.
 
The Index also found that prices in the three months to July were 2.1% higher than in the same three months a year earlier. This was lower than in June (2.6%) and is the lowest annual rate since April 2013 (2.0%). However, there was a slight rise (0.4%) between June and July, partially offsetting the 0.9% decline recorded between May and June.
 
“The rise in the employment level by 175,000 in the three months to May helped push the unemployment rate down to 4.5%, the lowest since June 1975,” commented Russell Galley, Managing Director, Halifax Community Bank. “However, this improvement in the jobs market has not, as yet, boosted wage growth, resulting in earnings rising at a slower rate than consumer prices. This squeeze on spending power, together with the impact on property transactions of the stamp duty changes in 2016 now being realised, along with affordability concerns, appear to have contributed to weaker housing demand.” 
 

Contact Us

If you are a first-time buyer then contact us today. Our experienced property lawyers can help make your home ownership dreams a reality.

 

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