Attaining home ownership is a dream for many young people. However, in recent years, the hurdles affecting the first-time buyer (FTB) market have left many would-be purchasers limping to rental properties, rather than making that all important first step into home ownership.
While affordability constraints continue to dominate the reasoning behind the lack of FTBs in the market, it is clear that there simply are not enough homes on this fair isle to sustain the population. As a result, properties that do become available are quickly snapped up or, for a large section of the population, remain unobtainable due to the sheer cost of buying a home.
With house prices reaching an average of almost £200,000 in England – £199,770 in August 2007, according to Halifax – it is no surprise that aspiring buyers are having to face up to the fact that they might not be able to make that coveted first step onto the property ladder.
However, the government is pledging to add further properties to the market by 2020 to begin to plug the gap between demand and supply. So will this move save the ailing FTB market?
The short answer, unfortunately, is no. With property prices continuing to increase, it is clear that the market is not merely dictated by the number of properties available.
While demand continues to far outstrip supply, increased property prices means that many aspiring buyers are being forced to reconsider their strategy, and look at the rental sector. While for some this is a lifestyle choice, for others it is a necessity. Indeed, a spokesperson for the Council of Mortgage Lenders (CML) revealed that a vast majority of adults wanted to become home owners, but some were unable to.
The spokesperson said: “Research shows that aspirations to home ownership remain high. More than three-quarters of adults want to be owner occupiers within two years. There is however a significant gap between these aspirations and the current level of home ownership, which extends to 70 per cent of the population.”
Political agenda
Gordon Brown, in one of his first moves as Prime Minister, admitted that the housing system was in need of regeneration, and unveiled plans to provide more affordable homes for aspiring buyers.
As part of his aim, Brown pledged to build an extra three million homes, in addition to extending the various HomeBuy schemes available. However, a recent report by the National Housing and Planning Advice suggested that three million homes would not be enough for the growing population, and suggested that 270,000 more homes would be needed each year.
Professor Stephen Nickell, who helped to write the report, said: “We built more than that number (270,000 properties per year) back in the 1930s in Britain when we had a considerably smaller population. And most other countries in the developed world, proportionally speaking, build houses at a rate faster than we do.”
With increased migration to the UK and a growing population as a result, there will soon come a time when there will be a struggle to find land to build on and the government has already confirmed that it will be using brownfield sites in order to meet its three million target.
However, Paul Bettison, from the Local Government Association, suggested that building properties would not quell the continued assault of house price growth on FTB hopes. He argued that the government was rushing headfirst into improving housing, without thinking of all the implications.
He explained: “For too long we’ve been pushing the simple figure of more and more houses, without thinking about the infrastructure. It’s no good building houses if there are no roads to get to them.”
So exactly what are the options for aspiring buyers? The government has reiterated its desire to help those keen to make the step onto the property ladder, but the fact remains that many are unable to. Page 2
