Mortgages  

Bricks and mortar are not for everyone

Inevitably, decisions and initiatives made at government levels will continue to be the main driving force behind any new supply chains and new-build developments. And finding or generating the right kind of solutions to take any existing or new initiatives to market are vital in helping to propel this sector forward.

At the time of writing the election result is still being dissected in terms of any short, medium or long-term effects across a variety of markets. Initial anecdotal comments suggest that this was a bullish outcome for the London property market, especially towards the higher end.

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But to really help outline the continued problems facing FTBs in London and further afield, a recent study carried out by KPMG illustrated that the average first-time buyer would need to earn £76,971 a year to get onto the property ladder in London, while the average salary in the capital is currently said to stand at £27,999. The average salary required to buy a home across the whole UK is approximately £41,000.

The study also found that more than two-thirds of people (69 per cent) felt there were not enough affordable homes in the UK, and 30 per cent believe they may not be able to afford a property. Some 72 per cent of 16- to 17-year-olds said they would like to buy a home within 10 years, but this ambition is appearing increasingly implausible as the housing crisis continues.

Of course the focus on FTBs should not be restricted to those in and around the capital. Thankfully, the recent market recovery – buoyed by a wider improvement in mortgage credit availability and government initiatives, most notably the launch of the two Help-to-Buy schemes – has served to help a growing number of first-time buyers up and down the country.

The increased prominence of this higher level LTV scheme has also helped more first-time buyers to access the market without financial support from family members. This is certainly a welcome trend. However, it is important to emphasise that while recent CML figures show 48 per cent of new buyer purchases to be “unassisted” – a marked rise from 34 per cent in 2011 – the importance of financial support from parents and/or grandparents for many FTBs should not be underestimated when it comes to raising a sufficient deposit. And facilitating this additional financial backing appears to be an area in which more and more lenders are looking to bolster their propositions.

Innovation can exist within the current environment and within regulatory boundaries. There are lenders who are willing to push these lending confines to better support FTBs. FTB-specific products remain available to help borrowers in the raising of deposits as well as helping them adjust to their new financial responsibilities as homeowners over the terms of their loans.