First-time buyers do not have a clear understanding of the routes to affordable home ownership and think more should be done to help them onto the property ladder, research from NHG Homes has found.
In a survey of 500 renters in London, NHG Homes – in partnership with research agency Opinium – looked at the key considerations for buyers trying to get on the property ladder, including perceived barriers and motivations for home ownership.
Of those surveyed, 1 in 4 respondents (23%) felt a lack of schemes to help first-time buyers was the main obstacle to home ownership while just under half (48%) saw affordability as one of the biggest barriers to getting on the property ladder.
Greater awareness of routes to home ownership needed
There is a lack of awareness of Shared Ownership – one of the only low cost home ownership schemes available at the moment – as 86% of respondents in the survey said they had heard of Shared Ownership, but only half of those were able to accurately define the scheme.
Of those surveyed, almost two fifths (37%) think Shared Ownership is too complex and saw this a key barrier to using the scheme. This gap in knowledge may be preventing first-time buyers from purchasing a home.
Deposits are a challenge, especially in London
The research found deposits are still one of the biggest challenges facing first-time buyers, especially in London where the amount required is so high.
Half of the survey respondents said the amount they could access for a house deposit is £15,000 or less, which is lower than would be required to buy on the open market in London.
The research found 3 in 4 (81%) of first-time buyers in London from all age groups surveyed do not have access to a deposit of over £40,000 – the 10 per cent you may need to buy an average one-bedroom home on the capital’s open market. It found the average deposit held by potential buyers surveyed is just £22,963.
Research findings also highlighted that the housing crisis is disproportionately affecting women, with single men looking to get on the property ladder in London on average having £11,500 more saved for a deposit than their single female counterparts.
Londoners finding new ways to get on the property ladder
Across London, buyers are finding new ways to combat the affordability crisis. Of the first-time buyers in London surveyed, half of the 18-24 year olds (48%) said they are planning to take on extra work to save the amount needed for a house deposit.
Many buyers have been turning to family for financial support with a quarter (25%) of respondents aged 35-44 saying they’re relying on money from their parents for a deposit and nearly one in five (18%) aged 18-24 planning to use money from other family members.
Diana Alam, director of sales and marketing at NHG Homes commented:
“Even as house prices start to fall month-on-month they remain high, especially in London, and affordability is a challenge for those looking to get onto the property ladder.
“The findings from our market research bring to light an important issue – many first time buyers are not fully informed about routes to affordable home ownership or made aware that they can afford to buy their first home without need for hefty deposits and large mortgage payments.
“At NHG Homes we really focus on making buyers aware of the options available to them and putting the choice in their hands. Many of our residents had never heard of Shared Ownership before they bought with us.
“As an industry we need to keep working to educate more buyers with the knowledge that home ownership in London is a choice available to them.”
