First time buyers set sights on a larger home

The typical first time buyer property, we assume, is a modest flat. A one or two bedroom apartment with an open plan kitchen and living room which suits a single person or a young couple - perhaps even a bijou studio if they are on a very strict budget or want to live in an expensive area.

But actually, new research from Clydesdale and Yorkshire Banks has shown that 72% of first time buyers in the UK are now setting their sights on owning a house rather than a flat. And this has changed dramatically, even in the last year, according to the survey.

Last year only 57% of first time buyers said they wanted a house rather than a flat. Nearly half of all respondents to the same question said they were looking to buy a flat, this year it is only just over a quarter.

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It would be nice to think that the change is due to a greater sense of confidence that buyers can afford a larger house and not have to climb the property ladder in costly increments. We have probably all been told by our parents that it is sensible to buy the most you can afford and grow into the property, even if it is a struggle financially at first.

Confidence to do this could be returning. Certainly the economic recovery could engender a feeling of job security and if not a huge pay rise, the promise of some increases in the future. All of which could lead to buyers setting their sights on a larger home first time around and it could also be encouraging lenders to place a bit more trust in higher loan to value mortgages.

There may well be a degree of all these factors in the statistics, but I suspect that mostly first time buyers are increasingly looking for three bedroom houses instead of one bedroom flats is actually a symptom of their continuing struggles.

Gone are the days of buying a flat with a small deposit and a mortgage dependent on your first pay packet. Now buyers strive to raise the 20 per cent deposit required to unlock the best mortgage rates and are stuck living with parents or renting while they do.

Lenders require borrowers to jump through hoops and prove they can afford a property long term - proof which often only comes with a stable career, which a new employee might not be able to provide.

The average age of a first time buyer is decreasing, slowly, from a high of late 30s in the depths of the financial slump, but those purchasing their first property are now more likely to be into their thirties, in a relationship and possibly with a child or two in tow, which is why increasingly a modest studio flat is going to be no use. Gone is the relatively simple progression of my generation’s property owning which started with a purchase of a small flat in your early twenties, probably with a 100 per cent mortgage and progressed steadily up to a family house when it was required. For me and many of my friends, from all sorts of different backgrounds, that has been the pattern and I can’t help feeling sorry - and a bit guilty - that the next generation often has no hope of doing the same.

I saw a cartoon in Private Eye this week which showed a new resident in the lounge of an old people’s home saying: “I’m so glad to be here, I’ve been living with my parents until now.”

For the twenty and thirty year olds around the country, saving hard to afford tens of thousands of pounds of deposit to buy their first home and simultaneously trying to get on with their lives, careers and relationships, it might raise a very rueful laugh.

That said, taking your time before purchasing your first property might not be a bad idea according to another survey out this week.

Twenty per cent of respondents to a poll by AA Home Membership said they like their home less now than when they moved in. The most likely reasons for falling out of love with it is discovering problems with it after moving in - a third of respondents cited this, while the same number dislikes their neighbours.

Others said they only lived in their property because it was affordable and had never liked it there, while some said it was too small, it required too much upkeep or their circumstances had changed and their property was no longer suitable.

Those stuck living with parents or renting, while dreaming of owning their own home can perhaps take comfort from the fact that at least they don’t have to add regret to their circumstances - yet.