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THE PLIGHT OF FIRST TIME BUYERS

By Rob Jupp

The very slight softening of house prices seems to be the only good news for first time buyers at the moment. Despite record employment figures for 16-64 year olds, home buying seems to be ever further out of their reach.

Regardless of political party it is clear the situation is becoming more urgent than ever as an English Housing Survey recently reported the average age of the first time buyer has now hit 33, up from thirty years old twenty years ago. It appears more challenging than ever to get on the housing ladder.

It has not been a good month for first time buyers: Mid-August Moneyfacts reported that the number of 95% LTV mortgages had reduced slightly. While it has not dropped by much, it does indicate a reluctance by lenders to lend at very high loan to values, maybe with a concern of property prices dropping a little. Long term, with such high demand, the shortage of housing and the lack of building property prices are only going to go in one direction and that is up, but lenders appear to be showing a cautiousness that may make it harder to get on the housing ladder if you only have a small deposit.

Just a day after the Moneyfacts report, came the news that the much trumpeted Help to Buy ISA cannot actually be used for a deposit, as the money will not be paid until house purchase completion. While the scheme with its 25% bonus, undoubtedly provides a good savings vehicle, in its current form it does little or nothing to actually help people onto the housing ladder.

Finally, in the same week, Coventry Building Society announced that it has had to withdraw its family mortgage, where parents help their children on the property ladder with an investment in their home, as the families are getting hit by the extra 3% stamp duty for owning a second home.

Although Coventry is now looking for other options and should be commended for the priority they have placed on helping first time buyers, it does mean that for most people who do not have parents wealthy enough to help them, it becomes just far too difficult to buy a house for the first time. It will get more difficult again if the Help to Buy scheme ends at the end of this year as it is due to do.

One must hope that the recently appointed Minister for Housing and Planning, Gavin Barwell, will be more effective than his predecessors. However, the fact that his role is split and now also includes Minister for London, indicates that Theresa May’s government may not be taking the issue of home ownership as seriously as they should be. As a career long councillor-cum-politician who appears to have little work experience outside of parliament, I am not entirely optimistic.

Helping to sort out the disparity between supply and demand in the housing market has to be a priority both for this government and the next. Too long have our young people been saddled with the consequences of ineffectual or absent government policy.