First time home buyer news: Finding a deposit constrains aspiring homeowners

20-Jun-2006

Rather than the cost of servicing mortgages, it is finding a deposit and income multiples that are constraining aspiring homeowners, research has revealed.

In 1994, some 34 per cent of British people aged between 20 and 24 were on the first rung of the property ladder, however this figure has now dropped to 20 per cent, according to data from Nationwide.

Fionnuala Earley, Nationwide's group economist, said: "Overall it is not the financing of the loan that is the biggest obstacle to the fresh faced first time buyer – rather it is finding the deposit necessary after the income multiple constraints."

Although first time buyers make up 40 per cent of the market, the category can be deceptive and includes a significant proportion of returning buyers, according to the building society.

Separately, data from the Co-operative Bank revealed that aspiring homeowners may have to save for up to six years to be able to afford the deposit on their first property.

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