Mortgage Misery - 70% of Brits Can't Make Home Ownership Hopes a Reality
70% of Brits who don't own their own property dream of buying one. But more than half of them are struggling as they don't have a big enough deposit to obtain a mortgage.
London, UK (PRWEB) November 3, 2009 -- A survey carried out among 986 users of consumer financial advice website Creditchoices.co.uk showed that Brits believe much tougher conditions in the mortgage market are stopping people getting on the first rung of the property ladder.
Halifax said today that house prices are now 7.1% higher than six months ago, so it looks like prospective buyers are being squeezed at both ends.*
Over three-quarters of survey respondents already own their own home (839 respondents), but of the remainder who do not (226 respondents) - more than 70% dream of taking possession of their own property. But the biggest hurdle is the size of deposit they need for a mortgage.
Chris Eagle, commercial manager at Creditchoices.co.uk, said: "An inadequate deposit is the biggest single factor which means people dreaming of buying a home can't get their hands on one."
The figures bear out - official October figures from the Council of Mortgage Lenders (CML), which represents the big lenders. The CML says the typical deposit for a first-time buyer is now 25%. Pre-credit crunch it was closer to 10%.
As the average house price was £161,816** in September, it means that hopeful buyers will need a deposit of over £40,000 to gain a mortgage.
And it's not just problems with saving a big enough deposit that are holding people back. Over half (57.5%) of people, questioned for the Creditchoices.co.uk survey, who want to buy a house for the first time, are not confident that they would be approved for a mortgage anyway.
Eagle adds: "The financial regulator*** is currently proposing firmer affordability checks on those applying for a mortgage. More than ever, lenders will scrutinize your income, debts and spending to see if you can afford to take out a mortgage."
But while borrowers are struggling to meet the financial criteria required for any of the currently available mortgage deals, they have another fear - rising house prices.
Over 40% (42.8%) of prospective home-buyers believe house prices will increase in the next six months, 10% higher was the most oft-quoted figure.
Meanwhile, a further 36.2% believe that prices will be pretty much the same in six months' time.
"First-time buyers really are up against it," says Eagle. "They've got a big financial mountain to climb to buy a house, and if they don't do it soon, many believe prices will be even higher."
Notes for editors:
1 The survey was carried out online between 6 September and 6 October 2009 among 986 Creditchoices.co.uk users
2 If you are not yet on the property ladder, why not (non-homeowners)?
| | - Don't have a big enough deposit (56.2%)
- Waiting for more houses to come onto the market (8.5%)
- Worried about job security (5.2%)
- Waiting for house prices to fall (4.6%)
|
3 Where do you think property prices will be in six months, compared to today (non-homeowners)?
| | - About the same (35.9%)
- 5% higher (31.4%)
- 5% lower (15%)
- 10% higher (10.5%)
|
4 How confident are you about securing a mortgage if you were to apply for one today (non-homeowners)?
| | - Not confident (56.9%)
- Very confident (19.6%)
- Quite confident (15%)
- Don't know (8.5%)
|
*Halifax House Price Index October 2009
**FSA Mortgage Market Review October 2009 http://www.fsa.gov.uk/pubs/discussion/dp09_03.pdf
***Nationwide House price index http://www.nationwide.co.uk/hpi/
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