Three in four (75 per cent) FTBs, who are currently renting or living at home with their parents, have reported setting their sights on buying property costing less than the current average UK house price of £184,152 – the latest figure from the Office of the Deputy Prime Minister (ODPM).
This compares to nearly 300,000 FTBs in the UK who plan to spend over the national average on their first home. 15 per cent of prospective new buyers plan to spend between £184,000 and £250,000.
Non-homeowners are more buoyant about buying this quarter. Overall, they are more upbeat about their ability to afford a house as the results showed fewer renters, and those living with their parents, feel they cannot afford a property (22 per cent) compared to 28 per cent last quarter. This suggests that the recent Base Rate cut has had an optimistic affect on first-time buyers’ hopes to get onto the housing ladder.
Stephen Leonard, director of mortgages at Alliance & Leicester, said: “Our survey reveals that most first-time buyers are pragmatic about the amount of money they can afford for their first home. With the majority choosing to look at houses below the UK national average, affordability is first and foremost in their thoughts.”
Paul Howard, director of intermediary sales at Portman, commented: “The results come as no surprise although there will of course be regional variations. There is still disparity between income levels and the amount of mortgage borrowing required so we will continue to see innovation in products incorporating shared-ownership options and increased aid from parents.”
