City Matters Edition 068

CITYMATTERS.LONDON 28 February - 13 March 2018 | Page 13
Property Matters
FIRST-TIME HOME BUYERS TAKING ‘EXTREME’ MEASURES TO SAVE DEPOSIT
Help is at hand
for first timers
FIRST-TIME home buyers are adopting drastic
measures to get a foot on to the property
ladder, moving in with family members and
selling personal belongings to scrape together
a deposit, according to new research.
Which? Mortgage Advisors surveyed 700 firsttime
buyers, and found that one in five have
moved in with family to save on rental payments,
while 37% worked overtime or longer hours to
build a bigger nest egg. Average house prices in
the UK topped £237,794 in January, according to
the Office of National Statistics, and a whopping
£729,134 in London, despite falling -10.9%.
Spending
Researchers found that close to half were
putting down a 10% deposit, equating to just over
£23,000 on average, or £73,000 for those looking
to buy in the Capital. People spend between
three and four years actively saving for a deposit,
according to the study, although a quarter said
they had saved for more than five years.
Most had scaled back their spending, with
41% going out less often and cutting out
non-essentials. A further 38% cut back on travel,
while 24% said they shopped around for the best
banking deals.
And while 62% of respondents saved every
month to be able to afford a deposit, savings
alone weren’t always enough, with close to a
third relying on an inheritance to top up the
balance and 29% receiving help from family.
A report from Legal & General estimated that
parents loaned more than £6.5billion to help
their children buy a home in 2017, a 30% increase
year on year.
David Blake, principal mortgage adviser at
Which? Mortgage Advisers, said that while it’s
easy for first-time buyers to become discouraged
by rising house prices, there are plenty of options
for those without a Bank of Mum and Dad to
draw from.
Shared ownership – where you buy 25% to
75% of a property and pay rent on the rest – is
an increasingly popular option for first home
buyers, as are Help to Buy equity loans; where the
government lends up to 20% of the property value
(40% in London) so you can buy with a 5% deposit.
The Help to Buy Isa is a scheme that lets
people saving for a deposit put away £200 per
month tax free, and when it comes time to buy,
the government will top up your savings, up to
£12,000, by 25%.
“For many, the prospect of saving a deposit
for a first home can be daunting, unrealistic and
even downright depressing,” said Mr Blake.
“However, there are various options out there
for first-time buyers... consider speaking to
an independent expert who can offer tailored
advice.”
getting on the ladder: an ever-growing list of schemes has been created to give first-time
buyers a better chance of purchasing their own property, but it still means pinching the pennies
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External computer generated image depicts London Square Spitalfields and is indicative only. Internal computer generated image depicts Apartment 10 at London Square Spitalfields and are indicative only. Details and price are correct at time of going to press, February 2018.