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First Time Buyer UK Housing Mortgage Market The Toughest For Decades

Housing-Market / UK Housing Aug 22, 2010 - 08:49 AM GMT

By: Nationwide

Housing-Market

Today's first time buyer entering the housing market will borrow more money and raise a larger deposit than at any other point over the past 25 years, with the price of a first home now 4.6 times higher than the average gross salary in the UK. This growing financial commitment means that it is more important than ever for first time buyers - who account for 38% of all house purchases in the UK* - to be able to sift through the mass of information available and ensure they can make educated choices about their house purchase - from considering whether to rent or buy, through to putting in an offer, exchanging contracts and moving in.


Typical first time buyer profiles over the past 25 years
First Time Buyer (UK) Today 5 years ago 10 years ago 15 years ago 20 years ago 25 years ago
Average Age* 29 29 30 28 28 27
Average house price £142,457 £129,918 £65,061 £38,701 £46,777 £26,422
Average borrowing (LTV)* 75% 90% 90% 95% 95% 95%
Average deposit £35,615 £12,992 £6,406 £1,935 £2,339 £1,321
House price to earnings ratio 4.6 4.8 2.9 2.2 3.4 2.9
Source: CML and Nationwide

To help make the home buying process easier, Nationwide has launched the First Time Buyers' Guide via its free interactive website, Nationwide Education:

The guide - which is independent of Nationwide's products and services, and the first interactive book of its kind - provides a comprehensive breakdown of everything a buyer needs to know when purchasing their first home, and includes:

  • the pros and cons of buying and renting
  • 12 easy-to-understand steps to buying a first home
  • a comprehensive glossary explaining property buying 'jargon' in simple language
  • a ten point action plan on buying a house and moving in
  • suggested questions to ask a mortgage adviser
  • a list of useful contacts detailing where to go for further questions and advice
  • a 'read aloud' function for those who would rather listen to the guide.
  • Caroline Hallatt, Nationwide's head of corporate responsibility, said: "The amount of information available on home buying can be quite overwhelming. We wanted to help first time buyers by giving them an overview of what they need to know in every day language and to make it available all in one place. This guide is fully independent of Nationwide products and services and is designed to help anyone considering buying or renting their first home."

Martin Gahbauer
Chief Economist
Tel: 01793 655434
fionnuala.earley@nationwide.co.uk
Roy Beale
Media Relations Officer
Tel: 01793 655689
roy.beale@nationwide.co.uk

Notes: Indices and average prices are produced using Nationwide's updated mix adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. Price indices are seasonally adjusted using the US Bureau of the Census X12 method. Currently the calculations are based on a monthly data series starting from January 1991. Figures are recalculated each month which may result in revisions to historical data. The Nationwide Monthly House Price Index is prepared from information which we believe is collated with care, but no representation is made as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third party commercial purposes do so entirely at their own risk. All changes are nominal and do not allow for inflation. More information on the house price index methodology along with time series data and archives of housing research can be found at www.nationwide.co.uk/hpi

http://www.nationwide.co.uk/

Nationwide Archive

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Comments

james
15 Dec 10, 01:52
Mortgage market

Despite the pressures on government finances, today’s comprehensive spending review is no time to make further cuts in state support for borrowers in difficulty.


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