New research suggest that in the UK more and more first time buyers are relying on parental help to raise finance for the huge deposits now required for home buying.
The research reveals a huge jump in the percentage of young people requiring help to raise finance, up more than 30% since last year. The new figures reflect the change in lenders requirements since the freezing of credit on early 2009. A record eight in ten first time borrowers now require help to raise the appropriate finance for the deposit on homes, typically around 25% of the properties value.
In the UK, there are tentative signs that lenders lending criteria have slowly eased from the last few months of frugality - possibly a reflection of the country’s quiet expectation of a turnaround in the market. The average first time buyer now puts down a £30,000 deposit - roughly the same as the average wage in the UK.
Whilst first time buyer figures continue on an upward trend for the forth consecutive month, giving rise to the current optimism that we may have seem an end to the housing slump - the big picture still shows we have a long way to go. In May there were 14,000 new buyers registered, up from the lows of 9,000 in january.
In 2008 however, figures were as high as 30,000 first time buyers every month acquiring property. In recent weeks there have been numerous reports of a upturn in the UK housing market, with a sustained increase in buyer interest and an increase in property sales - giving rise to a general optimism that we may have seen the bottom of the market.
In the U.S., there has been much talk of a bottoming out of the market. President Obama was recently quoted as saying that the economic stimulus plans affect would only really come into play towards the end of the year, and that is was still to early to witness it’s real effect. In the UK certainly, we appear to be seeing now a gradual turn in the market, be it small and gradual.
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