Property lock out faces Royston youth
PUBLISHED: 09:41 18 December 2011
FIRST time homebuyers are being "locked out" in North Herts and South Cambs, claims a national organisation - with figures revealing deposits of nearly £70,000 may be needed to get on the ladder.
The figures, issued by the National Housing Federation (NHF) in a Home Truths report, reveal that the average property in North Herts now costs £268,000 and a home in South Cambs will set buyers back £275,086.
With some first-time buyers, according to the NHF, now requiring a 25 per cent deposit, it means that for an average property, a deposit of about £68,000 would be needed. The NHF claimed this week that these figures were contributing to a “generation locked out of a broken market”.
The average price of a house in North Herts is nearly 10 times the average salary of £26,800, while in South Cambs it is 11 times higher than the £24,939 earned on average.
But the required salary to get a 75 per cent mortgage is £57,553 and £58,947 respectively.
Steve Thompson, manager at Thomas Morris’ Royston branch, said: “There are certainly fewer first time buyers now than in past years. The credit crunch has meant that it is more difficult for first time buyers to borrow and the continuing squeeze on domestic finances makes it harder to save the necessary deposit funds. House prices have, however, fallen since the market peak in 2007/2008 and sustained low mortgage rates actually suggest that buying now is a financially sensible decision for first time buyers in a position to do so. The likelihood is that house prices will again increase in the future as there is a shortage of property being built in the UK and a growing population so long term property will still be a good investment.”
Royston’s MP Oliver Heald said: “I think we need to get back to a more sensible mortgage market where younger people can buy a property without an enormous deposit.
“I know young people are finding it very hard to save at the moment. If they can’t go to the bank of Mum and Dad it’s difficult to get loans.
“The government is looking to see if money can be found to help young people. One way would be to see if the banks require smaller deposits.”