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Hope for the lost generation of buyers

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For several years, young buyers have been set an impossible task when trying to make the arithmetic work in the housing market.

In a recent survey by YouGov, over half of 20-34 year olds said the biggest factor in putting their plans to buy a property on hold was the level of deposit required by lenders. Now a survey by the National Housing Federation says 28 per cent of parents would rather see property values fall to help their offspring get into the housing market.

With an overwhelming number of school leavers heading to university, the majority of 20-34 year olds are crippled by debt when they graduate. Their 20s are spent surviving with their focus on securing a decent job. They might want to invest one day but are not in the position to do so right now. The average age of the first-time buyer is 36, although a little younger in our business at 31, with over a third of 20-34-year-olds renting and over a quarter living with their parents.

Here is the frustration for our sector – the majority of those in their 20s are not in a position to invest and there is still a pent-up demand of 30-somethings who are ready to buy. The YouGov survey showed two-thirds of the 25-34-year-olds are considering buying imminently. They are waiting for market improvement before they pounce. National broker MoneyQuest tells me it has seen a 24 per cent increase of enquiries from FTBs in the first half of this year compared with last.

Interest could be due to the handful of lenders permitting FTBs to borrow up to 90 per cent LTV. The Newcastle has fixed rates and trackers for FTBs, with a 10 per cent deposit required. Post Office FS has also recently returned to the 90 per cent area with a two-year fixed product. If more follow suit and house prices drop, properties become in reach of this lost generation of buyers.

What is true of first-timers down the generations is they have a plethora of questions to get answered and fears to allay, which is where intermediaries come into their own. As a generation using the internet for pretty much everything, you can be sure the web is the first place they will go to get answers.

Brokers should think about their web presence. Ask what message your site presents to an FTB. It is critical that people come away with a clear picture of what is available to them and the encouragement and ambition they need to get it sorted. Make yourself available as the knowledgeable saviour – that is what they crave and deserve.

Rob Clifford is a founding director at If I Were You

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  1. This is a subject that can be discussed and written about ’til the cows come home, but the bottom line is that house prices relative to earnings are still are still hugely too high. This, as we all know, came about due to reckless lending and lack of regulation (which also enabled fraud to fuel the blaze).

    When I were a lad, an FTB proposition (the price of the house, not the amount of mortgage) was typically three times annual earnings, perhaps at a stretch three and a half times. Only once prices have slipped back significantly to something in this region will any sense of normality return to the market and we’re still a very long way from that.

    I feel sincerely sorry for young people unable to get a foot on the first rung of the property ladder, but all they can do is wait for things to find their way back to where they should be.

    To paraphrase Winston Churchill: “Never in the history of house buying was so much owed to so many by so few (very well paid regulators who neglected to do their jobs properly).

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