Two thirds of first time buyers in the UK believe that a lack of sufficient mortgage deposit is preventing them from buying a property, according to a new survey.
Government efforts to encourage them into the real estate market with shared equity schemes which require little or no deposit are simply not working, the survey from Miller Homes has found.
When it questioned 3,000 potential first time buyers, some 28% said they still believe that they will need to save for at least five years before finally getting the keys to their own home.
The study also revealed that the average first time buyer has spent a year and a half saving £3,863 towards their deposit, but think they need nearer £13,490 before they will be able to buy a property.
One in ten respondents said they have been saving for five years or more and still do not have enough of a deposit. While more than 30% have no savings to put towards a deposit at all. More than 20% felt they would need more than £10,000 for a deposit whilst a quarter of all respondents said they would ask for help from a relative in order to raise the cash.
‘These results show that deposit concerns continue to keep many first time buyers out of the housing market, despite Government and house builder shared equity schemes which aim to help people onto the housing ladder with little or no deposit,’ said Sue Warwick of Miller Homes.
‘Whilst many first time buyers have been helped by these schemes, it is clear that the message is not getting through to all,’ she added.
The survey also found that 48% of first time buyers were concerned about reports of lenders becoming more stringent in their lending requirements. However, 70% have not given up on the dream of owning their own home and 70% refuse to resort to desperate lending or credit to finance their mortgage deposit.
‘It is heartening to see that first time buyers are not giving up the dream of owning their own home and are not willing to resort to credit to finance a deposit. Whilst loan to values have become much tighter, the reality is that there has never been a better time for first time buyers to get onto the housing ladder,’ explained Warwick.
‘Prices are significantly lower and there is help out there in the form of shared equity deals which offer first time buyers 100% ownership of their home from day one. These measures mean that homes are more affordable to first time buyers than they have been in a long time,’ she added.