• Kevin Murphy

UK Housing: First-Time Buyers & Anxiety?

New research shows that first-time buyers in the first six months of this year reached a level not seen in a decade. Helping to increase the numbers are Government programmes such as Help to Buy and record low interest rates for mortgages. Also helping is the Bank of Mum and Dad who have been providing funding for deposits which on average in Britain is now at £33,127 whilst London demands £114,952 for home purchase deposits.The average deposit for first-time buyers has increased by £5,000 in the period since 2008 when the sum needed was £28,335.

Halifax reports that first-time buyers have increased by 21% over the past ten years in a review of housing and mortgage data by the Office for National Statistics and UK Finance.

The number of first-time buyers showed for the first half of 2018 a three per cent rise from 175,000 to 171,200 in comparison to the period in 2017. In comparison for the first six months in 2009 the number of first time buyers was 72,700 and the previous housing market in 2006 at 190,900.

Where To Buy

For affordability Scotland is is best for first-time buyers and has eight out of ten most affordable housing locations. The least affordable 10 locations are in London,. Pendle, Lancashire and Stirling, Scotland are the most affordable with prices at three times local average gross earnings of £97,387 for Pendle and £143,148 for Stirling. The area of Brent in London is ranked the least affordable with average home prices at £478,995 with 12.7 times gross average earnings.

Halifax contributes the rise in first-time buyers to Help to Buy which was introduced in 2013 and allows a deposit of 5% and has given 128, 318 first-time buyers the opportunity to get on the property ladder. As the report indicates the amount of deposits has risen with higher housing prices with the average house price in 2008 being £172,659 and £208,741 in 2018.

Consequently the average first-time buyer in London is having to confront the local housing price increase of 46% over the last decade to £419,608 and the South East with home prices up 37% to £210,639 in the same period.

For first-time buyers in Northern Ireland average home prices are a third lower, down 33% since 2008 to £124,035.

The analysis shows that as for the average age nationally of first-time buyers is now at 31 which is an increase of two years over the past decade. London is now at 33 since 2008 when the average age was at 31 the oldest in Britain for a first-time buyer.

Russell Galley, managing director at Halifax:

'Despite these increases, the number of first-time buyers continues to grow and is nearly back to the peak seen of 2006.’

'Government measures, such as Help to Buy, and record low mortgage rates continue to make buying more financially attractive than renting, with savings of £900 a year.'

Moneyfacts show current mortgage rates continuing to be low with the average two-year fixed rate at 2.54% whilst In 2008 the fixed rate was at 6.94%.


Are the pressures of being a first-time buyer leading individuals in to states of anxiety when buying their homes?

A recent review by Propertywire reports that first time buyers are putting their overall health at risk in trying to get on the property ladder.

Research by specialist bank Aldemore indicates that:

'Some 47% of recent first time buyers have had to rebuild their lives due to the compromises made to buy a home but the majority, 72%, believed the stress had been worth it and 84% found the experience empowering. But that does not prevent first times buyers being stressed,"

The report also states that due to the complexity of of home purchasing that 52% in 2018 said the process made them ill with the number being 35% in 2017.

Other findings include 48% of the first-time buyers having their property contracts fall through creating stress and damaging relationships. The stress also has caused 43% of self employed first-time buyers giving up their work and going to work for someone else due to the challenges of securing a mortgage.

Damian Thompson, director of mortgages at Aldermore:

‘With the average first time homeowner taking almost six years to get on the property ladder, it is understandable that they will face challenges and hurdles along the way. However, it is concerning how negatively the house buying process is impacting health, personal relationships and careers,’

‘First time buyers experience huge amounts of pressure when looking for their first home, and our latest research shows that this has significantly increased over the past 12 months; this can be assigned to the fact that buying a first home feels more out of reach than ever before,’ he added.

Nicky Lidbetter, chief executive officer of charity Anxiety UK on the stress of moving house:

‘For first time buyers, typically young people, this big life event can come at a time when people are already coping with other life stressors including maintaining employment, building relationships and starting a family.'

‘As such, I am not at all surprised to hear that their wellbeing has been found to be adversely affected through the buying process, particularly with the rise in house prices. This has been somewhat reflective of the increased rates of anxiety, stress and anxiety-based depression that we are seeing in all areas of society, and indeed here at Anxiety UK.'

Even with all the stress 72% believe it was worth it in the end compared to 53% in 2017. While 84% found the experience 'empowering' when compared to 69% in 2017.

Damian Thompson director of mortgages at Aldermore says:

‘Becoming a home owner can be a very satisfying and rewarding experience. It is reassuring to see so many first time buyers express a sense of empowerment that has made navigating the pitfalls of the house buying process worth it.'

Nicky Lidbetter, chief executive officer of charity Anxiety UK:

‘It is something we all have to learn to cope with. Getting through successfully and with relatively little stress is much more likely if you take care of your mental wellbeing and the good news is that this doesn’t necessarily mean spending more money,’ she pointed out.‘

'For those with higher levels of stress and who may be at the point of developing an anxiety disorder, we recommend seeking help. Your GP is well placed to provide advice and information. Anxiety UK too offers a range of accessible support services, including a national network of trained anxiety experts, developed to fit around people’s modern, busy schedules.'

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