Friday, April 1, 2011
Category:
Home Improvements
According to HSBC, it would appear that ‘hundreds of thousands’ of prospective first time buyers (FTBs) are unable to get on the property ladder. With approximately 200,000 FTBs per annum, this is reportedly less than half the number recorded in ‘more typical market conditions’.
A new HSBC survey has revealed that 78 percent of non-homeowners, who have never previously owned a property, ‘aspire to be homeowners’. Of this group, 86 percent of those between 18 and 24 years of age wish to be homeowners, along with 84 percent of those between 25 and 34 years of age. HSBC has pointed out that these statistics imply that more than 90 percent of all UK households would like be homeowners. In contrast, 68 percent have actually become homeowners.
Findings have also shown that just 19 percent of homeowners are expecting to get on the property ladder in the next five years. However, 45 percent reportedly believe that they will never be able to purchase a property.
The survey uncovered that ‘raising the required deposit’ was the ‘key reason’ for 69 percent of respondents not having purchased a home yet. For 59 percent, the reason was reportedly cited as being ‘insufficient income to support the mortgage’, whilst 27 percent had ‘concerns over unemployment’.
It has been reported that at present, the average price of a FTB house stands at £136,842 – 6.6 times the average earnings of a young single person (£20,654). However, HSBC has highlighted that industry-wide lenders are ‘typically reluctant to lend more than 4 times income’. Therefore, the result is an ‘affordability gap’ of 2.6 times income, which is equivalent 39% of the property price (£53,700).
Stuart Beattie, HSBC's head of mortgages, comments: "Our study proves that the aspiration to be a homeowner continues to be exceptionally strong. Over 80% of young non-homeowners are aspiring to buy a home but are being prevented from doing so due to lack of affordable homes.
"The key to helping buyers back into the market is to help them obtain the cash deposit that responsible lenders require before granting a mortgage. To this end both Government and private sector interested parties need to come up with innovative schemes to help aspiring FTBs. HSBC is committed to helping FTBs and is currently working on a number of initiatives that will help the FTB cause."
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Homeowners who have recently managed to get on the property ladder, and who would like to put their personal stamp on their new home, could consider taking out a
secured loan. One of many finance options available, a secured loan for home improvements could be used to completely redecorate and refurbish a new property in accordance with personal tastes. What’s more, borrowers may also wish to maximise any outdoor space that they may have acquired by means of a landscaping project in readiness for those long summer days.
