First-time Buyers Face Toughest Test in 70 Years

First-time buyers are facing the toughest conditions in 70 years, with rising house prices and high mortgage rates making it increasingly difficult to get on the property ladder. A new report by the Building Societies Association highlights the need for radical change to make home ownership more accessible.

First-time Buyers Face Toughest Test in 70 Years

The dream of owning a home is becoming increasingly elusive for first-time buyers. According to a report by the Building Societies Association (BSA), the current market conditions are the toughest in 70 years. The report highlights that first-time buyers are facing a dual affordability struggle, having to raise a deposit to buy a home and pay a mortgage.

The housing market is becoming increasingly unaffordable for first-time buyers.

The cost of renting has also soared, with private rental costs in the UK rising by 9.2% in the last year. This has led to many being priced out and stuck in renting from private landlords. The BSA suggests that the market needs to change to allow more people to buy a home.

Mortgage rates are relatively high compared to the last decade, making it even harder for first-time buyers to get on the property ladder. The report suggests that home ownership among younger people has been in decline over the last 20 years.

First-time buyers are facing the toughest conditions in 70 years.

The BSA’s report argues that new thinking and radical changes are needed to make home ownership more accessible. The current situation requires two above-average incomes, and house price growth has been higher than earnings growth for some time.

The report also highlights that many first-time buyers are relying on parental support, with half of them receiving an average of £25,000 from their parents. This has led to concerns over rising house prices in rural areas, with the County Councils Network saying that house prices in rural counties are the most unaffordable outside London.

Rising house prices in rural areas are pricing out local people.

The BSA is calling for a review of the first-time buyer market and is urging the government to use its powers to help those wanting to buy their first home. The report’s findings are a stark reminder that the housing market is broken and needs to change to allow more people to own their own home.

Ways to Make Your Mortgage More Affordable

Make overpayments. If you still have some time on a low fixed-rate deal, you might be able to pay more now to save later.
Move to an interest-only mortgage. It can keep your monthly payments affordable, although you won’t be paying off the debt accrued when purchasing your house.
Extend the life of your mortgage. The typical mortgage term is 25 years, but 30 and even 40-year terms are now available.

Making your mortgage more affordable requires careful planning.

The BSA’s report is a wake-up call for policymakers and the mortgage industry. It’s time to rethink the way we approach home ownership and make it more accessible to first-time buyers. The current situation is unsustainable, and something needs to change to prevent a whole generation from being priced out of the housing market.