First-timer buyers need more help
Figures from the Office for National Statistics (ONS) released this week showed that house prices are continuing to rise, albeit at a slower pace than before.
Patrick Bamford, director of mortgage insurance for Genworth, said that while the overall picture was improving, the government needed to act to help first-time buyers
“A lack of access to affordable mortgages continues to hit hopeful first-time buyers as limited lending through high loan-to-value products endures,” he said.
“Help to Buy has encouraged greater availability of products for those with deposits of just 5% or 10%, yet take-up remains restricted. These restrictions compounded with rising house prices and a lack of supply means first-time buyers are still typically putting up a 20% deposit: a monumental hurdle to overcome before stepping onto the property ladder.”
While the ONS found house price growth was its slowest in more than two years, borrowers with a small deposit still face significantly higher rates.
This has left many wannabe buyers reliant on parental support, Bamford added.
“Even improved pricing of loans is not enough to counter the trials first-time buyers face. Although the price gap between 75% and 95% loan-to-value mortgages has narrowed, all but the wealthiest – or those with support from the Bank of Mum and Dad – still face far higher costs, squeezing monthly budgets.”