In its report, The politics of a rationed housing market, it revealed first-time buyer numbers remained 2.2m behind predictions, despite significant government investment in homeownership, suggesting current policy was failing to hit the mark.
So far, 90,000 new home sales have been made under the Help to Buy equity loan, NewBuy and FirstBuy schemes and 74,000 mortgages have been completed with the support of the Help to Buy guarantee, but the government has failed to reverse the decline in homeownership.
Between 2010 and 2013 the number of owner-occupied homes in the UK fell by 270,000. This decline may now be stalling as the latest English Housing Survey showed no change in owner occupation rates between 2013 and 2014 and 2014 to 2015, but there is yet to be any increase in homeownership levels.
Despite the raft of schemes available, first-time buyers say raising a deposit remains the biggest barrier to getting onto the property ladder.
IMLA’s analysis of data from the Building Societies Association from March 2016, found 61% of first-timers were locked out of home ownership because they were unable to raise a deposit. Some 39% felt they would be unable to access a large enough mortgage to buy a home, compared to 34% who said affordability was the main barrier to securing a home loan.
Peter Williams, executive director for IMLA, said: “Restoring access to high LTV loans for first-time buyers who can afford them has been an important part of the post-recession recovery, and helped avoid an even wider chasm between actual and expected first-time buyer numbers.”
He added: “Government support for high LTV activity in the last few years demonstrates they are a legitimate and valuable tool for supporting access to home ownership, especially where there is the added benefit of a guarantee to ensure stability within the financial system. It is vital this part of the market does not diminish after the end of this year, pushing many aspiring buyers back to square one.”