First time buyer deposits to rise to £81k within a decade
Analysts believe that owning a home is becoming an increasingly exclusive club as the amount needed for a deposit continues to rise, despite government promises to the contrary.
For younger generations, the dream of owning a house of their own has faded greatly over the last 20 years. Since the turn of the millennium, house prices have sky-rocketed, and despite assurances made by various governments, it looks as if the woes of the youth are set to continue.
As it stands, a first-time buyer needs an average of £51,821 to gain approval for a mortgage in the UK. And in a country where a large percentage of young people living in rental properties – especially those with children of their own – are struggling to cover simple living costs, the chances of saving up over £50k without relying on the bank of mum and dad is likely to remain outside the realms of possibility.
However, new estimates released by mortgage brokers L&C Mortgages have stated that by 2027, that figure is set to rise as high as £81,000 – up to 28% of the full value of an average home.
While different areas exhibit vastly different prices, even in the cheapest areas, that figure is set to hit over £30k. In areas around the capital, however, that number is likely to be more than £245,000.
“First-time buyers could be forgiven for giving up hope on owning their first home,” said David Hollingworth from L&C Mortgages.
“There is some stark variation between cities but the fact that London deposits could be almost hitting a quarter of a million pounds by 2027 is alarming. It makes sense for first-time buyers to try and raise as big a deposit as possible but that is very much easier said than done in today’s current climate.”
While many Tory MPs are happy to promote the changes made in 2017’s Autumn Budget regarding stamp duty cuts for first time purchases, the overriding austerity measures that keep a growing percentage of the population under a proverbial glass ceiling in terms of personal financial growth are ensuring that property ownership remains a distant dream.
Many experts believe that the knock-on effects from these issues in the present day will likely have a negative impact on the economy in the near future, as those owners who need to sell their house fast will find it harder and harder to find a buyer – ultimately forcing them to accept a lower amount in order to sell. Moreover, it could even deter homeowners from selling at all, increasing the chances of the market becoming stagnant.
Can’t find a buyer? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.