‘First-time buyers will be age 40 before they can afford to buy their own homes’ – The Sun
If you live in London or the south east, rocketing rents and catapulting house prices are probably having a detrimental effect on your household budget. Certainly, getting on the property ladder in London is quite a feat, especially as house prices in the capital are currently averaging around the £500,000 mark. But, according to Kate Faulkner, property market analyst
and commentator, the bigger picture isn’t quite so eye-watering. Rents are averaging 2.5 per cent lower than in 2008, and declining house prices outside of London is good news for first-time buyers.
‘Everyone gets obsessed with price falls, but it’s great news for first-time buyers and those wanting to trade up,’ says Faulkner. ‘A percentage of people who bought their home in 2006 or 2007 have gone into negative equity but the majority of buyers have benefited. Yes, you sell for less, but you save money on the property ladder.’
What’s more, the government’s latest Help To Buy scheme announced in this year’s budget, which provides an interest-free loan of up to 20 per cent if buyers can raise five per cent, will see a rise in the number of people being able to afford their own house – and well before they’re 40.
And, as Faulkner points out, the scheme will ultimately encourage developers to build more properties, creating a ‘virtuous circle’.
‘It’s not a total panacea,’ she concedes. ‘The scheme also helps lenders, too, and some may say they have enough protection already, but for the average buyer, it enables them to access better mortgage rates and to buy a bigger house for an expanding family.’
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