First Time Buyer Advice

First-time buyer advice: where to get on the property ladder in 2015

 Thinking of buying your first home? Canny buyers can snap up a property for £100,000.

The statistical evidence was stark. In 1991, according to the Office of National Statistics, 65 per cent of people aged between 25 and 34 owned their own homes. By the end of 2014, the figure had fallen to below 45 per cent.

Shelter now estimates that in some parts of the country it will take more than ten years to save the sort of deposit that lenders are asking. Most would-be first-time buyers are having to make discreet enquiries at the Bank of Mum and Dad.

But the outlook is not nearly as gloomy as it would appear at first glance. In fact, for a whole range of reasons, 2015 could be the perfect time for first-time buyers to get on the property ladder.

Halifax figures show that more first-time buyers took out mortgages in 2014 than in any year since 2007. Confidence is returning and, with lenders offering significantly better deals to such buyers, the time is ripe to take advantage. Add the Government’s Help to Buy scheme into the mix and other economic uncertainties – such as if and when mortgage rates will rise – become less daunting.

The cooling of the housing market is particularly good news for first-time buyers, who understandably get depressed when they see prices galloping away into the distance.

Most experts are predicting quite modest price rises in 2015 – not much more than 2 per cent. But the medium-term outlook is rosier. Savills, for example, is expecting UK property prices to rise by 19 per cent in the next five years – quite a carrot for anyone who is lucky enough to get their foot on the property ladder this year.

Savills expects the South East to lead the way, with five-year price increases averaging 26.4 per cent. The East – counties such as Norfolk and Nottinghamshire – should also perform well. The Savills predicted growth is 25.2 per cent. In areas such as the North East, where growth of 12.6 per cent is predicted, homeowners will still do better those having to rent. And slow-and-steady is generally better than boom-and-bust.

Not surprisingly, most of the ‘hot spots’ for first-time buyers are to be found in the South East, on the outer fringes of the commuter belt. Dartford in Kent, where house prices are broadly comparable, is another hot spot. Six out of ten residents are under 44.

Milton Keynes is a particularly good spot too where a typical one-bedroom costs around £120,000 and first-time buyers now account for 10 per cent of all households.

In London, first-time buyers are in shorter supply, though some of the more enterprising ones are taking advantage of part-ownership deals. At Greenland Place in the Surrey Quays, owned by the L&Q Housing Association, you can get a 25 per cent share in a one-bedroom flat for £80,000.

Even outside the South East, there is a glimmer of light at the end of the tunnel. ‘The main problem facing first-time buyers in this part of the world is a shortage of suitable properties,’ says John Woodhall of John Woodhall Properties in Stockport. ‘But the good news is that lenders are being pretty accommodating, with some still offering 95 per cent mortgages. With the prospect of interest rate rises later in the year, now could be a wise time to buy. £100,000 in Stockport would buy you a nice one-bedroom flat or a small two-bed terrace.’

Generation Rent is not yet out of the woods. But it really does seem possible that the worst may be over – and that 2015 will see a significant increase in the number of first-time buyers. Long may it continue.


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