First time buyers split into haves and have-nots
Published by Max Salsbury for 24dash.com in Housing and also in Finance
mortgageImage: via Shutterstock
The current generation of first time buyers are split into property haves and have-nots, according to a report from HSBC.
Those aged 25-36 - the traditional age group for FTBs - can expect their current circumstances to have a significant effect on their future property purchases and those of their children, the study says.
According to HSBC, property haves (those on the housing ladder already) are likely to follow a relatively conventional path through the housing market. The average age of a FTB is currently 29, just one year older than it was 30 years ago. The process of saving up to buy a property took them on average around two years and eight months, two months less than they expected. However, two thirds (64%) had help from their parents.
Property have-nots within today’s 25-36 generation don’t expect to buy their first home before the age of 35. In contrast, at 35, property haves will be trading up and moving into their family home. Property have-nots are projected to move into their family home at the age of 42.
Pete Dockar, head of mortgages at HSBC, said: "Homeownership continues to be an aspiration for the majority of young people. This study shows postponing their purchase has long term implications not just for their future property ownership, but their ability to help their own children step onto the ladder.
“Deposits remain an essential ingredient to getting a mortgage, but in comparison to previous generations affordability is still healthy, so first time buyers can feel confident about making their first step."
Those aged 25-36 today who own property are likely to pay off their mortgage aged 60. However, property have-nots will still be paying off their mortgage at the age of 67 and a half, the report says.