Providing housing to meet the needs of fist time buyers

First time buyers are increasingly becoming a bigger part of the housing market with the value of mortgages in the first quarter of 2018 increasing by 6% on the first quarter of the previous year, according to a new report by Savills. A number of factors have led to this, with Help-to-Buy (where buyers have to raise 5% of the deposit with the London Help-to-Buy providing a further 35% as an equity loan) being a significant contributor.

The age of first time buyers is rising in the South East of England where 41% were aged between 30 and 39. This trend mirrors that it takes longer to save for the higher deposits required in a market where prices are so much higher than incomes. It means that younger people on lower incomes are no longer able to get onto the housing ladder in the same way that their parents and grandparents did.

Mix’s housing model ensures that new homes are delivered to meet the requirements of the older buyers as wells as provide affordable homes for the younger less well-off buyers.

We think that London Help-to-Buy should be extended to permanently discounted affordable intermediate homes to level off the playing field and give the younger generation a fair chance of getting on the housing ladder.

References
Savills Research – New homes and first time buyers – June 2018