The number of first time buyers has not changed in the past ten years and levels are below what they were 20 years ago, a new survey has revealed.
In the Government’s latest English Housing Survey for 2015/16, the first time buyer report has revealed that the overall number of first time buyers decreased from 922,000 households in 1995/96 to 675,000 households in 2005/06 and has remained at this level since.
Today’s first time buyers are older than their 2005/06 counterparts. They are also more likely to buy with a partner and to have dependent children.
The survey revealed that the mean age of first-time buyers in 2015/16 was 32 years and that 21% of first time buyers were aged between 35 and 44 years, up from 16% in 2005/06.
Due to an increasing need for two incomes when buying a home there has been a marked increase in couple households among first time buyers. Some 74% of first time buyers fell into this category in 2015/16, up from 66% in 2015/06.
Similarly, the proportion of first time buyer households with dependent children increased from 23% to 37% over the same period.
The report also found that first time buyers are more likely to live in the private rented sector prior to buying and have high incomes and more help funding their deposits than was the case twenty years ago. For example, in 2015-16, the mean deposit for all recent first time buyers was £48,831, while in London, average mean deposits reached £94,088, compared to elsewhere(£40,931).
First time buyers are reportedly using savings as a common source for deposits, with the use of savings increasing from 66% in 2005/06 to 81% in 2015/16.
The latest English Housing Survey also includes findings relating to future home owners. The survey reveals that between 2014/15 and 2015/16 there has been no change in the proportion of private renters expecting to buy, with the figure staying at 59%.
Affordability was cited as the main barrier to home ownership, among renters not expecting to buy, with about two thirds (65%) citing this as their reason for not buying. This has increased from from 56% in 2008/09.
Of those not expecting to buy, 3% said it was because they liked the flexibility of owning, while 10% said it was because they like where they live.
According to the survey, almost all owner occupiers (97%) expect to stay in owner occupation; three quarters (75%) of social renters expect to stay in the social rented sector and about a third (31%) of private renters expect to remain in the private rented sector.
Looking at affordability, the report states that there were approximately 1.5 million households containing at least one adult who would like to buy or rent their own accommodation, but could not afford to do so. This equates to 7% of all households. Across these 1.5 million households there were 1.9 million adults living in such circumstances and the majority of these adults were working full time (67%).
The report also highlighted that of the households that had applied for a mortgage, 70% had their application approved.
But the main reason households did not apply for a mortgage was because they did not think their deposit was large enough. This was mentioned by 47% of renters who considered applying for a mortgage.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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