However, recent research from Zoopla suggests that – at least recently – more individuals have been able to do this, and there appears to be a growing number who can extricate themselves from high rents and get over the obstacles that are there for them in buying a house, most notably in the form of deposit and affordability.
Forgotten in all the media hullabaloo recently about the government potentially resurrecting Help to Buy, is the fact that last year first-time buyers were the largest buyer group and there is a very good chance that, not only will they be this year, but the numbers of first-time buyers will grow.
A more positive landscape
Now, I’m not suggesting for one minute that we have a ‘perfect’ housing market environment for first-time buyers to access, and that everything is working in their favour.
But I do think the market is retrenching back to a point where it is slightly easier for first-time buyers to purchase their first home, even with the major – and often severe – obstacles they have to overcome including saving for a deposit, meeting affordability criteria and finding a house they want to buy in the first place.
Now, why might this be? Well, there of course a plethora of reasons – buy-to-let landlords not being so acquisitive and more selling property than buying could be a reason, house prices dipping down over the last 12 months, more appetite from lenders in the high loan to value (LTV) space, certainly after the mini Budget fiasco.
All add to a more positive environment, albeit one which still comes with high mortgage interest rates – certainly compared to pre-mini Budget – and where there are still a lot of people stuck outside the market who can’t call upon parental support to help them out either with a deposit or a guarantor.
However, for advisers and their first-time buyer clients, there is further good news here in terms of an increased number of 95 per cent LTV products available to them, and the fact that pricing – particularly in the shorter-term fixed-rate sector – continues to inch down, even while Bank Base Rate (BBR) goes in the other direction.
Interestingly, the government’s decision to extend its own Mortgage Guarantee Scheme for high LTV lending is a positive, even if the vast majority of lenders using a risk mitigant for this business are actually using a private alternative like ours due to a more competetive price, greater flexibility in structure and the option of referrals.
However, as we’ve seen before, the government being ‘involved’ can be a source of comfort for the entire industry even if they’re not inclined to use its ‘one-size-fits-all’ approach.
Lenders opening up
That has certainly filtered through into high LTV appetite, and as mentioned, with prices dipping, it has meant a slightly lower deposit bar to get over for first-time buyers, which can allow them to move ahead with a purchase now rather than having to wait.
In that sense, the market could be said to be returning to its norms, with the lifeblood being the first-time buyer and with more opportunity for advisers to help these clients who undoubtedly need advice perhaps more than any other demographic.
It does concern me more than slightly that the government is therefore considering another Help to Buy-esque foray/rehash/sequel, which will undoubtedly distorts the market, ups prices and tends not to help the very group it is trying to help the most.
For those reasons, and more, I would suggest the government does not return to what it might see as ‘past glories’ and instead allows the market to breathe, to heal, to find its own solutions and its own way which, in my view, would be much more positive for all.
