FINANCE
Dare to dream
EXPERT COMMENT
Our analysis showed a deposit of £5,000 – compared to a typical 5% – would make a huge difference to rst time buyers across the country by reducing the time it takes them to save up and achieve homeownership, from 7.5 years (in London), to around 2.5 years. While £5,000 represents a 1% deposit for those who need to borrow the maximum amount available, the key is that customers are still putting money into a deposit, they still have to demonstrate strong creditworthiness and pass an affordability assessment to be eligible for a £5k Deposit Mortgage. It creates a level playing eld for those who don’t have nancial support from their families to fall back on, after our research showed that 38% of rst time buyers now receive nancial help from friends and family. The research showed that 78% of rst time buyers feel homeownership is becoming an elite privilege, while 63% believe the UK is in danger of becoming a nation of renters. This is a situation we believe can’t be allowed to continue. We’ve recommended that the Government re-introduce some form of state support for rst time buyers, however, for now, we hope this £5k Deposit Mortgage will help rst time buyers overcome the deposit barrier.
According to a new report, many first time buyers are feeling despondent about getting on to the housing ladder. But there are plenty of ways to make some progress, says Kay Hill
ladder is tough, it isn’t impossible – so we’ve looked more closely at these worries to see what solutions are out there.
New research from Cornerstone Tax has revealed the biggest worries of first time buyers: 59% of Brits say they can’t afford to save for a deposit 54% say that family are unable to help them towards a deposit 44% cannot live in their desired location because of increased house prices 42% say their biggest anxiety is that they will be stuck renting forever 31% of Brits say that because of the cost-of-living crisis, they have spent their deposit savings. David Hannah, Group Chairman of Cornerstone Tax, comments, “Our latest findings illustrate a stark reality on the ground of the nation’s housing market, with the dream of homeownership remaining outside the grasp of many would-be buyers.” While getting on the housing
DEPOSIT WOES
Not having enough money to save, or being forced to spend savings to keep afloat during the cost-of-living crisis, are near the top of everyone’s worry list – so try to focus first on a three-pronged attack to make the most progress – boost earnings, cut spending and make the most of saving. Boost earnings – could you do some overtime, go for a promotion or even fit in a weekend job? It’s tough, but if you focus all your efforts even for six months, you’ll make real progress. Alternatively consider a side hustle. If you make things to sell (upcycling, baking, crochet etc) or provide a service like dog walking or babysitting, you can make £1,000 a year tax-free (although
Ben Merritt, Director of Mortgages, Yorkshire Building Society
122 First Time Buyer June/July 2024
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