More than half of first-time buyers changing plans due to closure of Help to Buy: mortgage guarantee scheme

POSTED: 20th December 2016
IN: Newsroom

Key findings:

  • 52% of surveyed first-time buyers said the closure of the government’s Help to Buy: mortgage guarantee scheme has affected their planned property purchase.
  • Raising a deposit continues to be the biggest obstacle highlighted by potential first- time buyers, with 39% of respondents stating that raising a deposit was a bigger hurdle than property prices (34%), which was cited as the main obstacle before the EU referendum.
  • In line with raising a deposit being viewed as the most significant obstacle to home ownership, almost seven in ten (69%) of respondents said they are or would consider living with friends or family to help save for a deposit, rising to 81% when including those who would be willing but for whom it is not an option.
  • Almost a quarter of respondents who don’t already own their own home (23%) surveyed said that they are not planning to ever own a property.
  • Twice as many self-employed respondents said securing a mortgage was the biggest obstacle when compared to those in full time employment (20% and 7% respectively). Only 6% overall cited mortgage affordability as the biggest obstacle.
  • Demand remains steady, with no change in the number of buyers looking to purchase their first home in the next 12 months.

The latest First-Time Buyer Index published by Aldermore, the specialist lender and savings bank, shows home aspirations have remained the same quarter-on-quarter, with approximately one million people looking to buy their first home over the next year. However, more than half (52%) of surveyed prospective first-time buyers (FTB) said that the closure of the government’s Help to Buy: mortgage guarantee scheme has affected their planned property purchase. Among those who were aware of the scheme, the closure affects 63%.

Further findings show that more than three in ten people (31%) feel less confident about their ability to purchase their first home due to the economic uncertainty created by the result of the EU referendum, with almost one in five (17%) feeling significantly less confident. However, almost half (47%) said that the outcome of the Brexit vote has had no effect on their plans, less than those who felt the closure of the Help to Buy: mortgage guarantee scheme would have an effect.

There was a quarter-on-quarter rise in how many respondents felt it was currently ‘extremely difficult’ to buy their first property, up from 39% in Q3 to almost half (45%) in Q4.  Over half of those living in London (55%) said it was ‘extremely difficult’, up from 48% in Q3, while in Scotland this rose from 29% to 36% over the same period.

First home is not a family affair

When it comes to looking at what amenities first-time buyers feel are important, double glazing was ranked by respondents as the item they would be least willing to give up with their new property, with only 4% of respondents listing this option. Following double glazing, energy efficiency (6%), parking facilities (6%), proximity to transport links (7%), and shopping and leisure facilities (7%) were all viewed as more important by respondents than proximity to family and friends (8%).  Local schools were ranked the fourth-least important amenity, with 20% willing to sacrifice this.

Commenting on the research, Charles Haresnape, Group Managing Director –

 Mortgages at Aldermore, said:

“It is evident that despite strong activity in first-time buyer lending, those looking to buy their first home haven’t entirely shed their concerns about the effect the EU referendum will have on prospects, with almost half feeling less confident.

“The evidence would point to short-term and more concrete worries taking precedence in the minds of first-time buyers, with over half having to adjust their purchase plans due to the closure of the Help to Buy: mortgage guarantee scheme, which to date has helped over 80,000 people. It is important that lenders continue to offer high loan to value products to provide first-time buyers with a range of products to choose from, and brokers are kept up to date that many lenders will continue to offer 95% LTV lending after Help to Buy: guarantee scheme finishes at the end of the year.

“Demand has remained robust, with no change quarter-on-quarter in those looking to get on the ladder in the next year. While more than a fifth of 25 to 34 year-olds are planning to be on the housing ladder in the next three to five years, there was a fall in confidence for those aged between 18 and 24 when considering their prospects over the next ten years, with raising a deposit continuing to be a major concern.

“Regional disparities remain in the difficulty first-time buyers feel they face in buying their first property, and we hope that the Government takes account of these differences in the housing whitepaper due to be released in the new year.”


Notes to Editors:

All figures, unless otherwise stated, are from YouGov Plc.  Total sample size for the survey was 1,193 All GB workers/ students who plan to buy their first home. Fieldwork was undertaken between 28th November – 2nd December 2016.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Figures for employment status of were based on an initial higher sample size of 8,891. Figures for those predicting the timescale for their first property purchase were based on an initial higher sample size of 5,618. The survey was carried out online.

  • Journalists interested in speaking to case studies, Aldermore has a selection of customers who would be happy to speak and be photographed.

For further enquiries, journalists can contact:

Rachael Snelling, Aldermore
Phone:          0208 1853 102

Johnathan Priestley, Cicero Group
Phone:          0207 297 5954

For further information about Aldermore, please review our Notes to Editors page. 

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