First time buyers 'settling for less'

23-Aug-2007

More first time buyers are compromising in their efforts to get onto the property ladder, a study from GE Money Home Lending and the Future Foundation has found.

The research revealed that the proportion of homeowners who settled for less on their first property has risen from seven per cent in 1977 to 23 per cent this year.

And now just one in five first time buyers say they have avoided compromise when choosing their first home, the study added. Space was a particularly important area – 23 per cent of respondents said they were now willing to buy a home with less space than they'd like.

"It is clear that many compromises are being made by first time buyers to get on the property ladder in terms of space and environment," commented Gerry Bell, head of mortgage marketing at GE Money Home Lending.

"What we must ensure is that first time buyers are not making sacrifices in terms of affordability when buying their first home and that they are offered affordable products tailored to their needs," Mr Bell added.

The study comes ahead of plans to build more homes in London areas using the practice of 'superdensity' – packing more homes into a smaller space.

"Smaller first homes, and compromises with regard to space, are inevitable in a market where house prices are simply too high for the first time buyer to buy his or her ideal home," commented Helen Adams, Managing Director of first time buyers' advice centre FirstRungNow.com.

"Smaller properties in greater density represent a solution to a market problem, a natural progression from flats and apartments. The most important thing is to make sure these properties hold their values and that the mortgage payments are affordable," Ms Adams added.

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