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| First-time house buyers 'face big bill' | First-time house buyers 'face big bill' |
| (about 1 hour later) | |
| Many first-time buyers must save the equivalent of more than a year's salary to be able to afford a deposit for a home, the Council of Mortgage Lenders (CML) has said. | Many first-time buyers must save the equivalent of more than a year's salary to be able to afford a deposit for a home, the Council of Mortgage Lenders (CML) has said. |
| The typical deposit stood at £12,700 at the start of 2007, but rose to £31,500 by the second half of 2010. | The typical deposit stood at £12,700 at the start of 2007, but rose to £31,500 by the second half of 2010. |
| The figures were released as housing and lending bodies faced government calls to help first-time buyers. | The figures were released as housing and lending bodies faced government calls to help first-time buyers. |
| However, the actual lenders themselves were not invited to the meeting. | However, the actual lenders themselves were not invited to the meeting. |
| Housing minister Grant Shapps summoned various parties to "frank and open" discussions on difficulties facing first-time buyers. | Housing minister Grant Shapps summoned various parties to "frank and open" discussions on difficulties facing first-time buyers. |
| The government estimates 1.4 million households want to own their own home, but face a mortgage squeeze. | The government estimates 1.4 million households want to own their own home, but face a mortgage squeeze. |
| Slow recovery | Slow recovery |
| Mr Shapps used the meeting to discuss options such as creating new products specifically aimed at helping people get on the property ladder, as well as shared ownership or specialist insurance for lenders. | Mr Shapps used the meeting to discuss options such as creating new products specifically aimed at helping people get on the property ladder, as well as shared ownership or specialist insurance for lenders. |
| The CML and the Building Societies Association - which represent lenders - attended the summit along with watchdogs and regulators. | The CML and the Building Societies Association - which represent lenders - attended the summit along with watchdogs and regulators. |
| Mr Shapps said that he wanted members of the industry talking between themselves, but not to return to reckless lending levels. | Mr Shapps said that he wanted members of the industry talking between themselves, but not to return to reckless lending levels. |
| "I do not want to see the current generation completely locked out of the market," he said. | "I do not want to see the current generation completely locked out of the market," he said. |
| "The pendulum has swung too far the other way, where even if you have a good salary and save to get a deposit, you still cannot get a deposit. | "The pendulum has swung too far the other way, where even if you have a good salary and save to get a deposit, you still cannot get a deposit. |
| "We want to do more to help aspiring first-time buyers - the average age of the first-time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability." | "We want to do more to help aspiring first-time buyers - the average age of the first-time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability." |
| However, the CML questioned the minister's figures, saying that the typical age of a first-time buyer who did not receive help from relatives was 31. | However, the CML questioned the minister's figures, saying that the typical age of a first-time buyer who did not receive help from relatives was 31. |
| The lenders' group said that funding problems for lenders and stricter regulations - which required lenders to hold more capital for lending to "riskier" borrowers - meant that things could not change quickly. | The lenders' group said that funding problems for lenders and stricter regulations - which required lenders to hold more capital for lending to "riskier" borrowers - meant that things could not change quickly. |
| "First-time buyer numbers will only recover slowly over time, and may take several years to approach the annual rate of 400,000 to 500,000 purchases that we have seen historically," the CML said. | "First-time buyer numbers will only recover slowly over time, and may take several years to approach the annual rate of 400,000 to 500,000 purchases that we have seen historically," the CML said. |
| "A range of initiatives - including shared ownership, product innovation and mortgage insurance - could all potentially play a part, but none is likely to be a magic bullet that restores normality to the mortgage market, for first-time buyers or anyone else. | "A range of initiatives - including shared ownership, product innovation and mortgage insurance - could all potentially play a part, but none is likely to be a magic bullet that restores normality to the mortgage market, for first-time buyers or anyone else. |
| "This is likely to be a gradual process as confidence in funding markets and lending decisions is restored." | "This is likely to be a gradual process as confidence in funding markets and lending decisions is restored." |
| The Building Societies Association told the minister that any new schemes needed to be run alongside a faster housebuilding programme. | The Building Societies Association told the minister that any new schemes needed to be run alongside a faster housebuilding programme. |
| 'Help' | 'Help' |
| Extra help cannot come soon enough for Nick and Marie Smith. They had been renting a home for four years, while saving for a deposit. | Extra help cannot come soon enough for Nick and Marie Smith. They had been renting a home for four years, while saving for a deposit. |
| The couple, who have two young children, realised that to raise enough money they needed to move in with Mr Smith's mother in Wiltshire. | The couple, who have two young children, realised that to raise enough money they needed to move in with Mr Smith's mother in Wiltshire. |
| "It cannot be for ever. I would be nice to be together in our own home," said Mrs Smith. | "It cannot be for ever. I would be nice to be together in our own home," said Mrs Smith. |
| They were keen for Mr Shapps to demand that lenders loosen their lending criteria. | They were keen for Mr Shapps to demand that lenders loosen their lending criteria. |
| "They have got to do something about this level of deposit. It is just ridiculous. Nobody can save that level of deposit," Mr Smith, 32, said. | "They have got to do something about this level of deposit. It is just ridiculous. Nobody can save that level of deposit," Mr Smith, 32, said. |
| "It does not just affect first-time buyers, it affects everyone up the chain. He [Mr Shapps] really needs to get something going and improve their lending. | "It does not just affect first-time buyers, it affects everyone up the chain. He [Mr Shapps] really needs to get something going and improve their lending. |
| "The banks should be working for us, not the other way around." | "The banks should be working for us, not the other way around." |
| Separate research from housing website Rightmove found that 23% of people who planned to buy a property in the coming year would be first-time buyers. | Separate research from housing website Rightmove found that 23% of people who planned to buy a property in the coming year would be first-time buyers. |
| Generally, it is thought that double this proportion of first-time buyers is a sign of a healthy housing market. | Generally, it is thought that double this proportion of first-time buyers is a sign of a healthy housing market. |
| Trends | Trends |
| Figures show a downward trend in first-time buyer numbers throughout 2010. | Figures show a downward trend in first-time buyer numbers throughout 2010. |
| There was a sharp fall at the end of the year, according to the British Bankers' Association (BBA), although this was skewed by the rush to beat the end of the stamp duty holiday at the end of 2009. | There was a sharp fall at the end of the year, according to the British Bankers' Association (BBA), although this was skewed by the rush to beat the end of the stamp duty holiday at the end of 2009. |
| First-time buyers are regarded as crucial to any housing revival, but many have only been able to get onto the ladder with financial assistance from relatives. Some 84% of those aged under 30 required such assistance, the CML said. | First-time buyers are regarded as crucial to any housing revival, but many have only been able to get onto the ladder with financial assistance from relatives. Some 84% of those aged under 30 required such assistance, the CML said. |
| The average deposit required when buying a property was 23% in December, according to the BBA, up from 21% the previous month. | The average deposit required when buying a property was 23% in December, according to the BBA, up from 21% the previous month. |
| This has been partly the result of strict lending criteria from mortgage providers - including turning down potential borrowers with any blot on their credit history. | This has been partly the result of strict lending criteria from mortgage providers - including turning down potential borrowers with any blot on their credit history. |
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| "The banks should be working for us, not the other way around."How touchingly naive. Banks are a business. They have only one interest in you, and me. And that's to make money out of us. | |
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| For house prices to fall SIGNIFICANTLY you need the current owners to step off the property ladder with a big loss.The alternative for these people is to rent to the multitudes who can't get a mortgage. The ROI for rental property compared to other forms of investment is pretty damn good currently, so investors will keep prices up.There might be a slight drop in expensive areas but no miracles | For house prices to fall SIGNIFICANTLY you need the current owners to step off the property ladder with a big loss.The alternative for these people is to rent to the multitudes who can't get a mortgage. The ROI for rental property compared to other forms of investment is pretty damn good currently, so investors will keep prices up.There might be a slight drop in expensive areas but no miracles |
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| And yet no one bothered to invite any first time buyers to the seminar or even ask what the problem is. Myself and many of my friends are first time buyers. We are able to borrow and have a deposit. However we will ot pay a huge amount of money for a ridiculously overpriced property. Especially when everything is pointing to house prices going down. I don't want 25 per cent of a property either. | And yet no one bothered to invite any first time buyers to the seminar or even ask what the problem is. Myself and many of my friends are first time buyers. We are able to borrow and have a deposit. However we will ot pay a huge amount of money for a ridiculously overpriced property. Especially when everything is pointing to house prices going down. I don't want 25 per cent of a property either. |
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| We have been through a long period when house prices rose by 10% or 20% per annum, year after year, all while wages stagnated. In the previous housing booms of the 1970's and 80's wages rose a lot faster than the current 2% or so.To get things back in balance, we either need to see a similar rise in wages or else house prices need to fall by a significant amount. | We have been through a long period when house prices rose by 10% or 20% per annum, year after year, all while wages stagnated. In the previous housing booms of the 1970's and 80's wages rose a lot faster than the current 2% or so.To get things back in balance, we either need to see a similar rise in wages or else house prices need to fall by a significant amount. |
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| We bought our first house ( a 2 bedroom maisonette) when we were getting married in 1967. At that time my salary went up to £1,000 per year. We had to sell te car, and not go out very often for a year to save the £1,000 we were required to have as a deposit. I don't thing things have changed a lot, except the numbers. Peoples expectations are too high - they don't want or know how to save. | We bought our first house ( a 2 bedroom maisonette) when we were getting married in 1967. At that time my salary went up to £1,000 per year. We had to sell te car, and not go out very often for a year to save the £1,000 we were required to have as a deposit. I don't thing things have changed a lot, except the numbers. Peoples expectations are too high - they don't want or know how to save. |
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