Buying a home for the first time currently presents unique challenges; here's some advice to navigate these tough housing market conditions.
In a recent report published by Neal Hudson of the Building Societies Association (BSA), the pressing issue of home affordability for first-time buyers in the UK is brought to light. According to Hudson, becoming a first-time buyer is currently the most expensive it has been over the last 70 years.
The report reveals that private rental costs in the UK have risen by 9.2% within the last year, making it increasingly difficult for young people to save for a home. This trend, combined with the rising costs of buying a home, means that buying a home now requires two above-average incomes.
The report finds that the decline of home ownership among younger people is a long-standing issue, with home ownership among this demographic having been in decline for the past 20 years and showing no signs of improvement. Rightmove's data shows a lot of recent housing market activity is among large, four-bedroom properties, making these homes out of reach for most first-time buyers.
Hudson argues that a properly functioning housing market is dependent on first-time buyers being able to afford their first home. To address this issue, the report suggests that the government should commission an independent review of the first-time buyer market, regulation, and government intervention to increase the number of true non-returner first-time buyers.
The report offers various solutions that could improve the property market, including financial support, bridging the gap between ageist stereotypes, improving the supply of homes, revising the planning system, reforming property taxation, and ensuring Stamp Duty Tax continues to favour first-time buyers. Hudson claims that no change will be made unless the government initiates the first move.
The report does not address the role of private rental costs in the decline of home ownership among younger people or discuss the impact of the rising costs on the overall housing market. However, Hudson's typical positions as a senior housing analyst for the BSA usually include advocating for increasing housing supply, expanding government-backed financial support schemes, improving mortgage availability and affordability, focusing on affordable housing provision, and promoting financial education and advice for first-time buyers.
The government's role, according to the report, is primarily to enact and enforce supportive regulations, provide funding and subsidy schemes that reduce financial barriers for eligible buyers, coordinate with industry and local authorities to deliver new affordable homes, and ensure transparency and oversight to maintain fairness and avoid distortions in the housing market.
In summary, Neal Hudson’s report highlights the challenges faced by first-time buyers in the UK housing market and offers potential policy solutions to ease these pressures. The report calls on the government to implement planning reforms, expand financial support schemes, and foster increased affordable housing supply, thereby creating a more enabling environment for first-time buyers in the UK.
- The report by Neal Hudson of the BSA indicates that the housing policy in the UK should focus on increasing the number of true non-returner first-time buyers to ensure a functioning housing market.
- The report suggests that improving the supply of affordable homes, revising the planning system, reforming property taxation, and expanding government-backed financial support schemes could potentially improve the property market for first-time buyers.
- Neal Hudson argues that private rental costs, although not directly addressed in the report, could also contribute to the decline of home ownership among young people in the UK.
- The government's role, as proposed by the report, includes enacting supportive regulations, providing funding and subsidy schemes, fostering increased affordable housing supply, and ensuring transparency and oversight in the housing market to create a more enabling environment for first-time buyers.
