The results of a YouGov survey released by the CML highlighted more than half of respondents believe it is now "more difficult than ever before" for young people to buy their first home.
The CML has highlighted the various obstacles facing first-time buyers (FTBs) for some time. The survey confirmed there is a clear level of concern about affordability among the population as a whole. For example, the survey found:
- 88% of respondents said it was now either "very difficult" or "more difficult than ever before" for young people to buy their first home.
- 99% of respondents expressed concern at the level of debt that young people now take on at an earlier age. And the majority, 88%, see this as a wider problem for society and not just for the individuals involved.
- 78% of respondents think something should be done to make it easier for young people to buy their first home.
The CML was interested to gauge people's views about what they thought lenders should do. Among the 61% who thought that lenders should help, the greatest appetite was for lenders to structure the mortgage so that payments are lower at the start of the loan (68%), allow repayments over a longer period (62%), and reduce their mortgage rates (62%). There was much lower enthusiasm for lenders to relax their lending rules (25%) or lend more money (14%) - although those aged under 35 were more attracted to these options.
Among the 79% who thought that the government should help, the top three measures were abolish stamp duty (66%), introduce subsidies for all first-time buyers (65%), and reintroduce mortgage interest tax relief/MIRAS (63%). Ironically, the measures that the government is actually taking, to reform planning processes so that more homes can be built, and to target subsidies to particular types of people, were significantly less popular at 30% and 29% respectively.
Bob Pannell, CML head of research, remarked: "These results confirm that first-time buyer affordability is a major concern to people, whatever their own personal situation. While lenders have a continuing part to play in helping borrowers (within the constraints of maintaining prudent lending policies), most people believe that government needs to do more and should use tax breaks and subsidies to ease current affordability problems.
"While the CML recognises the potential distortions that fresh intervention can create, we do think that the government needs to act. There is immediate scope to reform the current framework for stamp duty on residential properties. The government is clearly undermining its own efforts to help would-be home-owners when a quarter of first-time buyers in London are forced to pay higher rates of stamp duty. We urge the Chancellor to address this in his forthcoming pre-Budget statement."
