Not only is this a deterioration on the 26% recorded going into 2011, but it means an even bigger gap to bridge to the pre-credit crunch 40% levels typically associated with a more active and healthy housing market.
Miles Shipside, director of Rightmove comments: “The first-time buyer remains an endangered species. They perform an essential role at the foot of the property market food chain in allowing sellers on the bottom rung of the housing ladder to trade up, and this makes them highly-prized.
With prospective first-time buyers even thinner on the ground than at this stage last year, sellers and their estate agents operating at the lower end of the market will need to fully understand the DNA of this group if they are to capture a sale.”
Rightmove’s study provides an insight into the make-up of those who will purchase their first home over the next 12 months. The average age of a first-time buyer in 2012 will be 32 years old, a lot younger than commonly reported due to the age difference between those who can afford to buy and those who cannot. ‘Trapped renters’ – those in the rental market who would like to buy but can’t afford to do so – have an average age of 35, and the clock continues to tick for them. The
plight of these frustrated would-be first-time buyers underlines the growing length of time many face being trapped in the UK rental market.
Shipside comments: “There has been a lot of speculation about the average age of first-time buyers, and the truth is those who can are in their early thirties, while those who can’t are in their midthirties and counting. Those who would like to buy but cannot afford to are watching the grains of sand slip through the hour-glass of life. They try to top up the glass by saving a deposit, but lack of mortgage finance and Father Time are combining to further postpone their prospects of buying.
Given the reality of the ongoing economic situation, many trapped renters are having their homeownership dreams postponed to their forties at best, or permanently shattered at worst”. Those purchasing for the first time expect to put down a very significant deposit in order to do so.
More than half (56%) expect to put down £20,000 or more, with the overall average deposit at £22,000. Raising a deposit remains the most commonly expressed concern amongst intending first-time buyers (36%), although there has also been a jump in those citing worries about personal financial security, up to 14% from 10% last quarter. First-time buyers are also significantly more price sensitive, with 61% stating that they feel house prices in their local area are above what is fair
and reasonable, compared with an average of 47% amongst existing home-owners.
Shipside adds: “It’s been a tough few years for first-time buyers and those in a position to proceed will have saved hard to avoid being ‘locked out’ of the property market. The hardy few who have successfully navigated the harsh landscape of employment insecurity, savings-eroding inflation and challenging deposit requirements are sure to be price-sensitive and determined to get full value from their first home purchase. They are feeling the pinch in terms of current house prices, and
sellers at the foot of the housing ladder will need to understand this stance if they want to snare a first-time buyer and move up the ladder themselves.”
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