Ridiculous Generalisation Of The Week
No, it’s not a regular blog posting (yet), but to be quite honest, with the amount of dubious data out there it easily could be.
The questionable claim that has caught my eye on this occasion comes courtesy of a survey into the saving habits of first-time buyers.
Finance site Fairinvestment.co.uk surveyed around 2,500 individuals and found that they put away around £139 a month, equating to £1,668 a year.
This, they pointed out, would be a mere dent when it comes to stumping up for a £26,127 deposit on your first home (average deposit of 15 per cent, average house price of £174,178).
So with all that scrimping and saving just how long would it take before the Holy Grail of property ownership was attained?
“15 Years!” screamed the headline, “15 Years for first-time buyers to save a 15 per cent mortgage deposit.”
That’s 15 years of saving at a consistent rate of £1,668 a year, obviously ignoring the pesky little matter of inflation and the unending variance in house prices – oh, and let’s not forget the see-sawing of mortgage rates and lending criteria…
You get my point. Unfortunately, as dull as they may seem, all those variables added to the mix are important and have and will continue to have a massive effect on buyer affordability.
Of course it could well take fifteen years for a first-time buyer to save up to buy their first home, but it could easily be less if mortgage lenders start to relax their LTVs and fees a bit. Sure, it may look improbable right now, what with LIBOR going up again and banks collapsing and merging left and right.
But the point is it could still happen between now and 2023, as could any multitude of economic outcomes that could affect the housing market.
And let’s not forget that a saver’s personal circumstances are more than likely to change massively over this time. I for one have no intentions of remaining the sole contributor to my future mortgage over the next decade and a half, and I’m usually incredibly pessimistic in that department.
But with first-time buyers undoubtedly facing a real struggle at the moment to claw their way onto the ladder I think it’s important not to depress the situation further with misleading hysterical claims.
The advice for FTBs, however, remains the same wherever you look. Sit tight and save. After all, tomorrow is another day…
Related Tags: first-time buyers, House Prices, Buying & Selling, mortgagesRelated Posts:
Posted by 
Loading ...
Hi Annie
What’s this…”I for one have no intentions of remaining the sole contributor to my future mortgage over the next decade and a half, and I’m usually incredibly pessimistic in that department.”
Crikey, by now you should be batting away the offers from willing suitors!.
On a serious note there is indeed a lot of dross statistics masquerading as PR. You are right to highlight this instance of it.
On the housing market, from my viewpoint in London I am now seeing big whacks on asking prices for 2 bed flats but houses are proving more resilient. Rents in both the mid and low end of the market inLondon seem to be coming under renewed pressure too.