Hopes rise of first-time buyers entering market
The first-time buyer share of the housing market could increase over the next year, driven by a wave of university graduates trying to get on the property ladder with their parents' help, a study has suggested.
Property search website, Rightmove, found that around 27 per cent of those planning to buy a home in the next 12 months will be doing so for the first time, an increase of 23 per cent a year ago.
However, this still remains "painfully shy" of the 40 per cent level typically seen before the credit crunch. Seven in 10 potential first-time buyers said they have been university-educated, and the graduates surveyed also tended to be slightly younger and have £10,000 more to spend on a deposit than non-graduate first-time buyers. The study found that the average age of a graduate prospective first-time buyer is 30, compared with a slightly older average age of 32 for a school-leaver. The typical age for a post-graduate intending to buy for the first time is 33. Graduates also said they had built up a first-time buyer deposit of around £35,000, compared with £25,000 for people without a university degree. Would-be first time buyers are facing a huge struggle to buy their first home, due to the shrinking availability of low-deposit mortgages and lenders' tightened borrowing criteria, with many demanding 20 per cent deposits rather than the 10 per cent typically needed five years ago.
Miles Shipside, director of Rightmove, said: "Joining the world of work straight from school may start your earning career a few years earlier, but in the current housing market it seems the downside is that it may delay being able to satisfy your home-ownership aspirations."
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Researchers found that graduates trying to get on the property ladder were also more likely to still be living in the family home, suggesting that they had been able to build up a deposit by living with their parents rather than moving into the rental sector, which has seen rents soar due to high demand.
Nearly a third of university-educated potential first-time buyers said they expected to have some financial family help in buying a home, compared with a quarter of non-graduates.
More than 18,000 potential buyers took part in the UK-wide survey last month.