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FTBs facing ‘the impossible dream'?
It is now almost impossible for many FTBs to become homeowners in the UK, claims the RICS.
According to the Royal Institution for Chartered Surveyors (RICS), accessibility and affordability indices, a first time buyer couple will now have to save over 100 percent of their joint take home pay, to build up the £27,738 needed for the up front buying costs on a typical home.
This equates to a substantial rise from the low point of 21 percent of income required in 1996.
This worsening accessibility has been driven by the reductions in loan-to-value ratios that lenders are offering buyers, as well as the continued burden of stamp duty and the other costs of buying a home.
Lenders are forcing would-be buyers to put up more money for deposits and given that real income growth has stagnated, getting onto the housing ladder is now only slightly below the all time worst level seen in 2004.
RICS senior economist David Stubbs, observed: "Access to the housing market has deteriorated as the credit crunch has taken hold of the mortgage lender sector.
"With mortgage approvals declining, the picture does not look like improving in the latter part of 2008 and first time buyers will find their path to home ownership increasingly blocked.
"Those who are able to access the housing market, will find that a bigger deposit will mean that mortgage repayments are reduced but with real incomes stagnating this will seem like light relief only.
"Homeowners' finances will continue to struggle with rising food and fuel costs making the burden of mortgage repayments even more difficult."
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