Habito comments on English National Housing Survey data

Commenting on today’s English Housing Survey, Daniel Hegarty, CEO and founder of Habito, the free, online mortgage broker said:

“Today’s results paint a troubled picture for first time buyers. While getting on the property ladder continues to be an aspiration for many, the survey findings show that it’s taking much longer, with the average age of a first time buyer rising from 31 to 33 years old over the last decade. First time buyers also increasingly can’t do it alone; the number purchasing with a partner or spouse has risen from 50% to 56%, with just 43% able to buy a home in their name only.

“Owning a property carries a clear benefit in terms of monthly outgoings, as mortgage payments are typically much lower than rental payments. Many renters are finding themselves trapped in a vicious circle of being unable to save a deposit as a third (33%) of their income is spent on accommodation, compared to just 17% for mortgage holders. That said, the survey found that the average deposit has fallen by 8% to £44,635, since 2016-2017, most likely driven by greater availability of lower-deposit (5-10%) mortgages.

“Despite this, nearly two thirds of first time buyers are falling into the upper two income quintiles. Ever more increasingly, buyers are relying on their parents or grandparents for financial help to get on the ladder. Even with the multitude of Government initiatives that encourage first time buyers into the market, the number of people relying on the Bank of Mum and Dad to help their home purchase has grown from 35% to 39% in the past twelve months, with 10% relying on inheritance. The gap between those that can call on family for monetary help and those that can’t is widening. Prospective buyers should also be aware of the product response from lenders who’ve launched new family mortgage products aimed at allowing parents different ways to help, outside of a cash gift. These mortgages range from linking interest-paying savings accounts to parents being the named guarantor on the child’s mortgage.

“The results also highlight the trend in consumers looking for longer term mortgages, with almost half (46%) having a mortgage of 30 years or more. These mean lower monthly payments but are more expensive in the long-term as the debt is paid back much slower. But, homeowners can do more to shorten their term. If you’re in a financial position to do so, many deals come with the option to overpay by 10% a year without getting a penalty charge – so check your annual limit and see if you could be mortgage-free sooner. “

Kindly shared by Habito