A tough climb: UK’s property ladder woes revealed
After the property market crashed during the 2008 recession, homeowners have been allowed a sigh of relief recently as things appear to be on the up again; but what about first time buyers? A combination of rising house prices and lacklustre savings rates has meant many of those wanting to get their foot on the property ladder have got to make some sacrifices.
A new survey has shed some light on how the nation is feeling about the subject, with some surprising results. When asked about the biggest obstacles faced when buying for the first time, the majority said saving a deposit and rising house prices were their biggest woes.
Despite living in the country’s most expensive city, Londoners were the least willing to give up some of life’s luxuries in order to scrimp and save for a house. Interestingly, they were also the region most concerned about rising property prices.[divider]
Living in a box
A recent report in the Guardian about a so-called studio flat highlighted just how dire the capital city market is. Likened to a shoebox, the cramped property is not for the claustrophobic, and is nothing more than a tiny kitchen, with a bed and a naked bulb hanging from the ceiling. It’s only saving grace was its location (near King’s Cross), but this didn’t stop it being snapped up for £170 rent per week.
To clarify the depressing picture even further, a penthouse based in the prestigious Hyde Park One development became the world’s most expensive flat, selling for a record £140m. If the flat rises to £175m as predicted, each square foot would be more than an eye-watering £10,000.
Those based in the North-East seemed to have a completely different attitude, and were much more likely to give up a portion of their luxuries, such as eating out and holidays, in order to save for a deposit. They also believed owning their own bricks and mortar to be more vital than any other region surveyed.
When asked how long they had been saving for a mortgage deposit, the majority (22.9%) said 8-12 months, and 25.6% reckoned you would need to save for 5 years or above. 19.3% of those quizzed reckoned that you would need to earn a minimum of £1201-£1500 pcm to even consider purchasing. The two main worries faced when biting the bullet and applying to a mortgage lender were income and credit rating.[divider]
Men and women had very different opinions on the subject as a whole; only 29.15% of men thought that income affected chances of becoming a homeowner, compared to 44.34% of women. Over half of the female respondents (60.19%) felt that the sharp increase in prices was the biggest obstacle, compared to 50.21% of males.
18-24 year olds were the most worried about their chances of getting on the ladder, which comes as no surprise considering they see the gap between their generally lower incomes and house prices widening week-by-week.
The older generation had different problems to contend with; the 55+ bracket felt being placed on a zero hour contract was their biggest hurdle. One thing that all age groups could agree on was clear; saving a deposit for a property is considered to be the biggest stumbling block for keen buyers.