The number of graduates pooling resources to get on the property ladder is increasing, with high levels of debt preventing them from buying for themselves, according to research from Scottish Widows bank.
Communications manager, Amanda Docherty, said: "First-time buyers are increasingly pooling their resources in order to get on to the property ladder. In principle, with a widening gap between earnings and house prices, it is a good idea, as it can help overcome some affordability issues. Two salaries stretch further than one."
Its figures show that more than half (56 per cent) of people who have graduated in the last ten years have not purchased a property and that, excluding mortgage debt, graduates owe an average of £10,586 in unsecured loans and on credit cards. According to Scottish Widows bank, 72 per cent of graduate first-time buyers have teamed up with a family member, partner or friend to buy a property, up from 69 per cent last year. Of the surveyed graduates who had not bought property, 70 per cent blamed high house prices.
However, more than two-thirds (69 per cent) of graduates with a joint mortgage would be unable to buy out the other party should the living arrangement not work out. "This is not an arrangement that people should rush into. Nobody wants to end up in a situation where they find it extremely difficult to share a home with someone they no longer get on with but can’t afford to do anything about it. With no exit route in place, graduates need to be fully aware of the size of the commitment involved in buying with someone else," Ms Docherty said.
Of the people surveyed that have a mortgage, more females (7 per cent) have opted for a joint mortgage arrangement than males (65 per cent) over the last ten years. Meanwhile, female graduates (76 per cent) also said it would be more difficult to buy the other person's share if problems arose than their male counterparts (59 per cent).
Amanda Docherty said: "These figures are perhaps unsurprising when you consider that women continue to earn less than men. Our survey revealed that only 34 per cent of the female graduates surveyed earn upwards of £25,000 compared with 49 per cent of the male respondents."
She also recommended options such as the Government’s shared ownership schemes, which can help graduates to get on the property ladder. "I would urge graduates to take the time to consider all the options that are available in the marketplace and choose the one that is right for their circumstances," she added.
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