Growing gap between market perception and reality for first-time buyers

Growing gap between market perception and reality for first-time buyers

Although the number of first-timers getting onto the property ladder in 2014 grew impressively, there remain many misconceptions about the state of the sector at the moment, according to new data from Halifax. 

It said that the gap between the reality in British property and the reality of the market is growing, and urged that more needs to be done to make sure that young people do not think they are being frozen out of buying homes. 

This comes despite a strong year for first-time buyers in 2014, with the Help to Buy scheme and the change to Stamp Duty rules that came about last year helping to boost the volume of people getting onto the property ladder for the first time. There are now only 90,000 fewer buyers than when the market peaked in 2006. 

But even though there are more and more people able to get themselves onto the ladder, Halifax said, there is a growing volume of people who think they have no chance of getting onto the property ladder. 

The report states that 79 per cent of 20 to 45 year olds believe banks don't want to lend to first time buyers, and 21 per cent believe it is basically impossible for young people to get themselves a mortgage. 

"This year’s report has revealed real changes in the first time buyer market in the last year. While there has been an increase in first time buyers in the last 12 months, at the same time there is also a growing group of young people who believe they won’t be able to get a mortgage," said , Craig McKinlay, mortgages director at the Halifax.

He added that it is 'urgent' for this belief to be addressed by the market so that the number of young people coming to market does not fall away. 

"We can educate people about the mortgages that are available to them, but there is still the underlying issue of needing to build more affordable homes."