Access to finance continues to remain a major concern for first-time house buyers in the UK, as 66 per cent of adults aged 18-40 years are expecting to receive help from family to get their foot on the property ladder.
The latest First-Time Buyers Report by the Yorkshire Building Society identifies various problems faced by those buying houses for the first time in the UK, and access to financial assistance remains the biggest concern. The study, which was conducted by the National Centre for Social Research, involved a survey of a nationally representative UK sample of 18-40 year-old people to examine the attitudes and concerns first-time buyers have towards buying their own home.
The survey brings to fore several concerns of the first-time buyers, who are finding it difficult to climb up the property ladder with the house prices inflating. While demand continues to rise, the number of houses entering the market has not kept pace with the growth.
Findings from the report show that relying on the ‘Bank of Mum and Dad’ (parents extending financial assistance to their children for housing) is becoming the norm, with three-in-five (59 per cent) would-be homeowners expecting to receive handouts from parents or other family members to buy a property. Around a third (31 per cent) expect to receive financial help with their deposit, in line with the proportion (29 per cent) of first-time buyers in England who received support with their deposit last year.
This is a disturbing trend, as more number of people is being added to the prospective house-buyers pool with majority of them unable to even save for the deposits. It also impacts the psychology of the houses-buyers, as seen in the survey. Almost four in five (82 per cent) of these young adults expecting to receive help to get onto the property ladder believe it’s unfair that their generation is finding it harder to buy their first home compared to their parents’ generation. The majority (59 per cent) of those expecting support are concerned that by accepting help it would negatively impact their parents’ future finances.
Aspiring homeowners also clearly still place importance on achieving their homeownership ambitions, with more than half (56 per cent) saying that buying a property was “essential” to feeling that they had succeeded in life, compared to 63 per cent in the 2016 survey. One in five (20 per cent) reported owning a house is more important to them than any other life event, including getting married or having children.
These findings indicate that the stakeholders of the housing sector in the UK are still long way from ushering in inclusive growth by making residential properties available to prospective buyers, especially first-time buyers. This calls for a paradigm shift to the approach taken to resolve the UK housing crisis.
Source: Yorkshire Building Society