Home ownership still a pipedream for graduate first time buyers in 2007

30 July 2007
The fourth annual Scottish Widows Bank Graduate First Time Buyer report launched today confirms the continuing struggle faced by graduate first time buyers to get a foot on the property ladder.

The report reveals that while 70% cite unaffordable housing as a major obstacle, almost one in ten graduates do not think they will ever be able to buy a house.

Considering that the market has seen the average property price rise 14% from £107,070 to a hefty £122,045 across most of the UK, rising to £179,228 in London in the last year alone, it is no surprise that graduates have a negative view of the property market.

Even graduates who have managed to find the average first time buyer deposit of £16,666, have done so with a partner – an incredible 63% believe they would not have been able to do it alone. And if they do manage to buy a property, one in five worries that they will not be able to make their mortgage repayments.

Commenting on the report, Richard Clark, Head of Product Development and Marketing at Scottish Widows said: “This year’s report reveals that the situation really is getting worse for graduates. The main issue is that property prices and inflation are continuing to rise, but starting salaries have not moved in line with this.

“First time buyers are struggling to save for that deposit, and recent interest rate rises are acting as a further deterrent. Owning a home is likely to remain a pipe dream for many.”

Debt is also clearly an issue. The report revealed that the average student leaves university with £10,361 to repay - a result of credit card, personal loan and student loan debt. But it isn’t just new graduates that are finding the move from renting to owning impossibility, a quarter that graduated ten years ago are still not on the housing ladder.

The study also provided suggestions for the mortgage companies including 15% who though that abolishing the need for a deposit and 13% thought that lenders considering future earning potential rather than current salary could help swing the balance.

Find out more about getting a First Time Buyer Mortgage