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Huge Aspiration Gap for First Time Buyers

Written by Sam Jones on 23 October 2012.

A large aspiration gap exists amongst potential first-time-buyers in the UK, according to LSL Property Services. London Mortgage Brokers Capital Fortune, report that the organisation found that 94 per cent of registered tenants want to become homebuyers, but only 7 per cent expect to buy this year. Furthermore, only 54 per cent believe that they would be in a position to make a purchase within five years.

Despite higher average LTVs in August, as lenders fight for business, prospective first time buyers still see saving for a deposit as the biggest obstacle to buying, with 47 per cent of buyers are not able to buy because they cannot put together a big enough deposit, up from 41 per cent three months ago.

Meanwhile, 14 per cent of buyers blamed high transaction costs, down from 15 per cent in May and 5.1 per cent claimed that the prospect of falling house prices concerned them.

LSL Property Services commercial director David Brown said: "There is clearly underlying demand for home ownership, but the size of the gap between those who'd like to buy and those who actually can reflects the frustration of thousands of potential buyers. The size of the average deposit may have dipped in August, but tenants are still balking at the prospect of saving over £26,000 at a time when rents and the cost of living are rising at a greater rate than salaries. With higher transaction costs on the back of the re-instated stamp-duty tax earlier in the year, the initial cost of purchasing a home is still a bridge too far for the vast majority of would-be buyers."

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