A survey of some 1,000 first time buyers by TSB suggests a large majority of them moved back to their parental home to save money on rent.
Around 80% moved back to Mum and Dad while an overwhelming 96% received financial help for their deposit, with 68% receiving help from family and 57% from friends.
The FTBs saved for 2.95 years on average. Typically those paying rent as well spent £960 a month in rent prior to purchasing their home but as a result of buying, 45% felt financially more secure.
The average age of first-time buyers went up to 32 years and the average length of mortgage term was 31 years.
Average deposits across the UK were 18.7% of purchase price. London was the highest at 23%, Wales the lowest at 13%.
To afford their deposit some 38% had delayed major purchases, 37% limited their socialising and a similar 37% took a second or additional job.
Craig Calder, director of secured lending at TSB, says: “It’s clear that compromise is key to getting on the housing ladder in a preferred location – with most first-time buyers forgoing a dream home but feeling relieved, and more financially secure having made the move.
“Many made sacrifices to meet their deposit targets – such as moving in with parents, and taking a second job. To secure the best deal for your housing and affordability needs, do speak with a broker, or your bank.”
Mary-Lou Press, NAEA Propertymark President, comments: “This has been a growing trend for some time, indicating how expensive it is for first-time buyers to get onto the housing ladder, so much so that they have to make enormous sacrifices and/or depend upon financial help from their relatives just to purchase a property.
“What is needed to make housing more affordable is targeted help, and we are seeing many financial institutions take a lead here with flexible mortgage products, as well as a sustainable supply of new homes that will stabilise supply and demand levels, which can hopefully be achieved by the UK government and the devolved administrations meeting their individual housing targets.”
This article is taken from Landlord Today