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Amounts of deposits are stopping first time buyers

July 9, 2013

Posted by Simon Misiewicz on 1st July 2013

Can you remember how much of a deposit you needed to buy your first home?

Does this mean that people will need to rent properties even more?

In May I wrote an article that suggested that the number of mortgage applications had increased. Indeed they continue to increase and as a result have now increased house prices.

A case of the old classic “supply and demand”.

UK house prices have continued their upward trajectory during the course of rising by 0.4% to £167,912 in June 2013 (1).

If house prices continue to increase and salaries remain unchanged how will people be able to buy their first homes?

Indeed, where will they live and will we see an increase in the rental market again in 2013?

Couples who start a family in their 20s could be saving for a deposit for 12 years – nearly double the time faced by childless couples (2).

This was based on the assumption that people needed 20% deposits, but we have seen that the government are providing 5% mortgage backing and mortgage lenders are decreasing the level of deposits people require.

So is there really an issue or are the media scare mongering?

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References:

(1)Rise In House Prices During May

(2)Generation Rent: 30 Years To Save For A Deposit



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Email: simon@optimiseaccountants.co.uk