It's not easy being a first-time buyer. Higher house prices, property market instability and stricter lending criteria are all combining to make things that much more difficult for today's aspiring homeowners, also known as 'Generation Rent'.
ONS data shows the age at which more than 50% of people own a home now stands at 36, up 10 years since 1997. Buying later means more people now face paying their mortgage into retirement. And with a recent study showing that today's young adults are only half as likely to own their own home as those born 20 years ago, it's little wonder so many despair of ever getting their foot on the property ladder.
A silver lining
However, recent figures show that things could be looking up. August data from UK Finance suggested it may be a good time for first-time buyers to take the plunge, the number of mortgages handed out to first-time buyers that August (35,010) was up 0.7% year-on-year, the highest figure since August 2007.
Help to Buy is at hand
Many young people think they'll be saving for years before homeownership is a real possibility. But they may not have to: a number of schemes have been introduced to close the affordability gap.
The Help to Buy: Equity Loan, for example, saw the government lend up to 20% of the cost of your home, meaning you only needed a 5% cash deposit and a 75% mortgage to make up the remainder. Successor schemes have included regional property price caps, ensuring access to those who need it most.
Meanwhile, Shared Ownership offers first-time buyers who can't afford to purchase outright the opportunity to buy a share of a property (typically between 25% and 75%). Owners then pay rent on the remaining share, with the option to purchase more of the property at a later date through a process known as 'staircasing'.
The rise of the 40-year mortgage
More lenders now offer longer mortgage terms, up to 40 years, to cater to prospective buyers who find it difficult to meet the affordability criteria for a standard mortgage. While this has the benefit of reducing monthly payments, the downside is that you'll pay more interest overall than someone with a 25 to 30-year mortgage.
Don't go it alone
Buying your first home can be stressful, and there's so much information out there that it can feel overwhelming. If you're unsure about which schemes are available or which mortgage term best suits your needs, get in touch.
Your home may be repossessed if you do not keep up repayments on your mortgage.