A helping hand for first-time buyers
It’s a new year and a fresh start for the property market – and according to John Elliott, Managing Director of Millwood Designer Homes, a positive one at that.
“Despite December being traditionally a fairly quiet month on the property front as people focus on the festive season, we still ended on a high with house prices rising 1.3% in December according to Halifax.
“2012 therefore saw little change for house prices and I doubt that 2013 will be much different. In fact, house prices in the final quarter of last year were just 0.6% higher than in the previous quarter.
“Most likely we will continue to see a similar pattern, with moderate rises and falls but with values remaining fairly level, probably ending close to where they started the year. This stability is vital to the recovery of the property market, and I think if we remain patient in 2013 we should see a stronger market in the years that follow.
“We will also see parents continuing to help their children financially in order for them to get onto the property ladder – particularly when you consider that buying is now cheaper than renting in 90% of 50 towns in Britain, with mortgages costing on average £1,080 less per year than renting.
“Research from The Equity Release Council has revealed that over 228,000 first-time buyers have been provided with more than £1.31billion in deposits by the bank of mum and dad over the last five years. Typically, 30% of first-time buyers received on average 20% of their deposit from their parents, whilst 6% received an average of 18% from older relatives.
“However, this help comes at a cost. 8% of children say their parents have delayed giving up work to help them financially, 10% feel they have used some of their retirement savings and 3% said their parents have remortgaged their home to help.
“This is great for the first-time buyers who have family members that are able to help them financially, particularly when you are looking at requiring on average £27k for a deposit. However, this should not be necessary, and it doesn’t help all those potential first-time buyers who are desperate to own their own property, tired of wasting their money on rent but unable to scrape together the hefty deposit required.
“This is the main issue that I can see holding back the recovery of the property market this year and so it is vital that we see lending conditions continue to improve in 2013.
“According to the Bank of England’s Credit Conditions Survey, lending conditions improved significantly over the three months to mid-December, partly due to the Funding for Lending scheme which launched in August 2012.
“It also revealed that the availability of credit to households is set to increase significantly over the next three months. With demand for house purchase lending also expected to increase, it looks like 2013 could be a busy period for the property market.”
Millwood currently has a range of properties in locations throughout Kent, Surrey and Sussex. For more information about any of the developments, visit millwooddesignerhomes.co.uk.