With house prices still so high, one in two first time buyers admit they’re hoping to get a higher paid job this year to allow them to venture into the world of property, but concerns obviously exist about whether this will be enough given the competition they face from those with existing equity.
The research also raises concerns that people could be faced with negative equity should the market turn. One in five (19 per cent) first time buyers would be worried about borrowing up to the maximum value of their home and ending up owing more than their house is worth. But this in turn leaves them in a Catch-22 position with unrealistically sizeable deposits to get together.
Geoff Greer, Yorkshire Bank’s chief operating officer (head of Yorkshire Bank), said: “I think everyone sympathises with the situation many first time buyers find themselves in. The struggle to build up deposits, and earnings which give them multiples high enough to afford even starter homes, is bound to be taking a toll – and could even be having an effect on the way young people are choosing to live.
“One in seven current first time buyers admit they felt they couldn’t afford a house by themselves, so moving in with a partner seemed to make sense. It could be that young people are making the decision to commit to someone when they wouldn’t otherwise have done so, simply because they want to have their own home.
“The increased financial pressure on young people also has implications on others in their lives. At a time when people would have previously flown the nest, 13 per cent of first time buyers have had to live with either their parents or their partner’s parents because they couldn’t afford a place of their own.”
