First time buyers cautious in the South West
Potential first time buyers in the South West are daunted by barriers to owning a home with many blaming high property prices and a lack of savings. But with a greater degree of understanding and financial planning, Stroud & Swindon Building Society says that a first home may be closer than they think.
Research by Stroud & Swindon on the views and opinions of potential first time buyers in the South West has uncovered serious concerns about how long it will take to save a deposit and get on the housing ladder. The reasons for these concerns centre on affordability, where over half of the respondents (54%) cite a lack of money and a belief that they wouldn’t be able to raise a sufficient mortgage.
The desirability of the South West as a place to live compounds the issue. 35% of respondents said that the high cost of property is a core factor in preventing people getting on the property ladder, particularly when combined with the lack of affordable first time buyer homes (33%). In fact, over half (53%) say, that they cannot afford a property in their ideal location.
This research confirms the difficulties that first time buyers face, but talking to an expert financial advisor may help overcome some of the issues. “As a local building society, we are uniquely positioned to understand the financial difficulties facing local people and have tried to address these by improving our first time buyer product range to include higher income multiples and no deposit mortgages” says David Rodney, Head of Marketing at Stroud & Swindon. “The house-buying process can seem complicated, but understanding it is fundamental to a healthy first time buyer market. Our research conducted across the South West confirmed that many potential first time buyers believe mortgages are too complex and that the buying process is confusing.”
Many first time buyers across the South West’s major towns and cities from Gloucester to Bristol to Stroud and Swindon summed their feelings up with comments varying from “My age group doesn’t really understand the ins and outs of property buying” to “The cost of property is too high and the whole process of buying a house is confusing” and “Mortgages are daunting.”
“Knowledge about the process of home buying helps to put peoples’ concerns into perspective. Taking out a mortgage is an important decision, but after seeking professional advice, potential first time buyers can make an informed choice that’s right for them. Mortgage lenders need to give guidance and advice about the benefits and risks of home ownership and whether it is an affordable option for individuals at the current time,” says David Rodney.
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Notes to editors:
Stroud & Swindon Building Society commissioned independent research of 361 people aged between 20-40 who have not yet bought their first home. The interviews were conducted in late May in five towns and cities in the South West. The views of over 100 parents of potential first time buyers were also obtained.
About Stroud & Swindon Building Society First Time Buyer mortgages:
1. 100% loan to value at a five-year fixed rate of 5.49% fixed until 31 August 2011 followed by Bank of England base rate +0.99% for the remaining mortgage term.
2. 97% maximum loan to value at a five year fixed rate of 5.39% until 31 August 2011 followed by Bank of England base rate +0.99% for the remaining mortgage term.
3. Reservation fee of £349 payable upfront and non-returnable.
4. An early repayment charge applies until 31 August 2011.
Mortgage terms
|
Less than 30 years |
30 year term |
| One buyer |
4 x salary |
4.3 x salary
|
| Joint buyer |
4 x first salary and 1 x the second
Or
3 x joint salary |
4.3 x first salary and
1 x the second
Or
3.5 x joint salary |
The maximum mortgage loan size is £175,000 and the minimum loan size is £75,000.
Borrowers must be 18 years of age or over and all mortgage loans are subject to status, conditions and a satisfactory valuation. All loans must meet Stroud & Swindon’s lending criteria.
About Stroud & Swindon Building Society:
Established in 1850, Stroud & Swindon is the 15th largest of the 63 building societies in the UK and the largest based in the South West with assets in excess of £2.5 billion.