Buying your first home is often seen as a sign of financial stability and personal growth. Yet, for many, homeownership remains challenging due to various financial and logistical barriers. According to a study by The Mortgage Lender, 50% of homeowners received some form of assistance to make their first property purchase [1]. We’re here to dissect the different avenues of support available to first-time homebuyers, both from private and public sectors, while examining whether current systems meet their needs.
Family financial support, affectionately termed “The Bank of Mum and Dad,” remains an integral part of several first-time home buying stories. The survey shows that 11% of new buyers relied on the family network for loans or gifts to fund their initial deposit. While family financial support can be helpful for some, it’s important to note that it is not an option for everyone.
For some, the Bank of Mum and Dad is either low on funds or nonexistent, which can exacerbate societal inequalities. The growing economic divide between generations further complicates matters. This form of aid is increasingly becoming a privilege, not a widespread practice.
Government programs offer some relief for those without family support. According to the study, 6% of buyers who had opened a Help to Buy ISA before the scheme ended have used the government savings scheme, which provides bonus payments for those aiming to secure a deposit. Another 5% tapped into the Lifetime ISA, another incentivised savings program, while 6% used Shared Ownership schemes.
Despite the availability of these government-backed schemes, a significant 42% of those surveyed expressed dissatisfaction with the government’s efforts to assist first-time buyers. The main criticisms often revolve around several key issues. First, there is the matter of affordability. Even with government support, housing prices in many areas remain prohibitively high for the average earner. Next comes accessibility; not all schemes are universally accessible, and some are no longer available or require specific qualifications, thereby excluding certain demographics from utilising them. Finally, there’s awareness; limited information often leads to a lack of knowledge about the range of support systems available.
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Climbing onto the property ladder can be a complex journey, with numerous financial, emotional, and logistical considerations. While family and government support have helped many first-time homebuyers, there is a pressing need for the government to evolve the support systems in line with changing economic conditions. The goal is to make homeownership achievable for a broader segment of the population.
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Status Mortgage Services is a trading style of Status Financial Services Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.
Approved by The Openwork Partnership on 23/10/2023
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SOURCE DATA:
[1] The Mortgage Lender – Half of homeowners with a mortgage had support getting on the ladder – The Mortgage Lender surveyed 2,005 nationally representative UK adults, of which 403 were homeowners with a mortgage – May 2023.
[2] Gov.uk – Help to Buy ISA
Status Mortgage Services is a trading style of Status Financial Services Limited
(Company number 08983516) which is an appointed representative of the Openwork Partnership, a trading style of Openwork Limited which his authorised and regulated by the Financial Conduct Authority.
Status Mortgage Services is registered in England & Wales no. 08983516. Registered Office at 12, Schooner Walk, Upnor, Rochester, Kent, ME2 4GZ .
The information on this website is subject to the UK regulatory regime and is therefore targeted at consumers in the UK.
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Approved by The Openwork Partnership on 30/01/2024
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