First Time Buyer Index reveals hope for first time buyers

First Time Buyer Index

The latest quarterly First Time Buyer Index published by specialist bank Aldermore, has revealed that the outlook for first time buyers is becoming increasingly optimistic

While a large proportion of first time buyers do believe it is still very difficult to get on the ladder, the First Time Buyer Index has revealed this has started to shift.  Currently just over a 35% believe buying their first home will be extremely difficult to buy in comparison to almost 39% in 2016.  Additionally, as the market begins to flatten, rising property prices are no longer regarded as a barrier, with a 10% decrease in those who consider it the largest obstacle to buying their first home.

First time buyer barriers are shifting

According to the First Time Buyer Index, the biggest concern for first time buyers across the UK continues to be raising a deposit and property prices. However, this perception varies across the country; currently around 45% of first time buyers in the East of England believe raising a deposit is the biggest barrier compared to 26% in London.  33% of first time buyers in the South East believe finding an affordable property and rising house prices are the biggest obstacles compared to 19% in the North East.

The First Time Buyer Index has also revealed that mortgage affordability and difficulties’ securing a mortgage has become viewed as more of an issue.  Over 12% of first time buyers believe mortgage affordability is an obstacle to getting on the ladder, in comparison to just 5% in 2016.

When it comes to saving a deposit, first time buyers are more willing to go it alone and are slowly becoming less reliant on friends and family to help them save.  59% are currently living with or would consider living with family and friends to get on the ladder.

A need for change

When it comes to what would help first time buyers get on the ladder – just over 26% believe building more homes would help them the most, 25% thought there needs to be a special stamp-duty free allowance for first time buyers and 24% believe better mortgage products need to be introduced.

Charles McDowell, Aldermore’s Commercial Director, Mortgages, said: “Over the past year we have tracked the outlook for first time buyers as well as the obstacles they are facing to get on the property ladder.  While the situation is by no means easy, there does seem to be light at the end of the tunnel for those trying to buy their first home.  Although property prices remain a hurdle, slower house price increases has given a glimmer of hope to those trying to get on the ladder for the first time. Instead, mortgage affordability and difficulties in securing a mortgage are becoming more of an issue for first time buyers.”


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