More help for young to get on property ladder urged

Brian ByrnesBrian Byrnes
Brian Byrnes | Supplied
Far too often, first-time buyers (FTBs) are thought of and treated as one homogeneous group, but their paths to homeownership are far from uniform, says Brian Byrnes of Moneybox.

At Moneybox, we recently commissioned research amongst more than 4,500 aspiring and recently successful FTBs to better understand this community. There’s no one-size-fits-all solution to address the issues facing the UK housing market, however, we believe that understanding the diverse needs of FTBs is key.

Aspiring FTBs in Scotland have, on average, been saving for nearly two and a half years, with the majority hoping to buy in just over two years, slightly more than the UK average of two years.

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Recent economic challenges have had an impact on FTBs in Scotland, with 61 per cent saying they have saved less towards their first home deposit than they had hoped. Some 39 per cent have cut back on their savings due to the cost of living, and 34 per cent because of rent increases.

The cost of living was particularly an issue for those living in Edinburgh, with 44 per cent saying it was a factor.

FTBs in Scotland have, therefore, been making great sacrifices to get onto the property ladder, with22 per cent reporting that they were delaying having a family for that reason.

To support their journey to getting onto the ladder, 43 per cent of Scottish FTBs wanted to gain a better understanding of the range of schemes and products available to them, with 39 per cent also wanting to better understand how to save for all the costs involved in buying a property. And 30 per cent were also keen to better understand where to find trusted sources of guidance for their questions about home-buying.Some 74 per cent of Scottish FTBs said they believed the government should do more to help FTBs, with building more affordable homes top of FTBs’ agenda for the government (43 per cent).

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FTBs also called for the government to review and future-proof the Lifetime ISA, with 22 per cent calling for the purchase price cap on a Lifetime ISA (LISA) to be increased in line with current house price growth, and 24 per cent asking for the withdrawal penalty on the LISA to be removed or reduced.

Across the UK, there were four groups that were facing particular challenges when it came to saving for their first property. Millennials were found to be the generation that most felt societal pressure to get onto the ladder, and the generation sacrificing the most to do so.

Women were found to face a significant savings challenge, with our research highlighting a gender deposit gap.

Those who are buying as single people also face a significant uphill battle to save for their deposit compared to those buying with others.

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And finally, our research highlighted the significant impact financial support has in helping aspiring FTBs onto the property ladder. No fewer than 61 per cent of aspiring FTBs expect to receive some financial support to get onto the ladder, which our research found would help them realise their dream earlier than they would have been otherwise.In Scotland, 60 per cent think they will receive financial support, with 37 per cent expecting to receive this in the form of a gift, and 26 per cent as a loan that they will need to pay back.

At Moneybox, we believe that enabling first-time buyers is not just about helping young people buy a home – it is a cornerstone to nurturing the future wealth creators of our society. It is through shining a light on the range of experiences across the FTB community that we can start to consider the measures needed to support first-time buyers’ needs in the short, mid, and longer term.

Brian Byrnes is head of personal finance at Moneybox

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