Issues for first-time buyers

This content applies to England only.

House prices are spiraling out of control. In the last 10 years alone, they’ve almost doubled while wages have barely risen. This means a whole generation of young people are unable to buy their first home, and families are increasingly being forced into a life of private renting.

The main reason is for this is that successive governments, since the 1970s, have failed to build enough affordable, decent homes.

Source: DCLG Live

The Government has introduced a number of schemes aimed specifically at helping first-time buyers, such as Help to Buy, NewBuy, and FirstBuy. But these are limited and only address one part of the problem: mortgage affordability.

These policies will force house prices even higher, leading to more unsustainable debt for first-time buyers and more people priced out. If we really want to help the next generation get on to the housing ladder, then we need to build more affordable homes.

Shelter also believes in the short term, shared ownership could be a real solution for those forgotten families locked out of a home of their own but not willing to take on a life of private renting. Some 95 per cent of low- to middle-income families would be able to afford a three-bedroom home with shared ownership. Helping them to get a place of their own, and escape the short-term contracts and unpredictable nature of renting.

We need a lot more shared ownership, but first it needs to change to operate much more like the mainstream market. We want to see politicians lead the way in creating a bigger, more mainstream shared-ownership market. A commitment of £12 billion over four years could provide enough to build affordable family homes for 600,000 forgotten families, and make substantial headway in reducing our shortage of homes.

Advice for home buyers

It’s important that first-time buyers receive independent advice when trying to get on the property ladder. This helps make sure less experienced buyers and the financially insecure aren’t forced into taking on loans and mortgages that could leave them at risk of repossession further down the line.

Although most mortgage lenders’ policies advise borrowers to get independent financial advice, this isn’t available to everyone. Those on lower incomes may struggle to find enough money to pay for this, while independent advice services can struggle to meet demand.

If you’re looking to buy a home, you can get advice and help from Shelter for free.

Shelter’s view

Better early advice

Shelter believes the Government and mortgage lenders should offer funding for advice at an early stage, and provide ‘preventative’ financial advice.

Longer term fixed-interest mortgages

Shelter welcomes the Government’s proposed measures to improve the availability and affordability of longer term fixed-interest mortgages. The Government should also explore measures to encourage the development of other types of mortgages that transfer risk away from individual consumers.

Shared ownership

Shelter believes the Government should invest in making shared ownership mainstream by building enough shared ownership homes to help 600,000 families. This would ease the housing shortage and improve the housing situation for thousands of people and families trapped in the private rented sector.

Building more affordable homes

Shelter believes that if we’re going to truly tackle the problems in the long term, we need to be building more affordable homes.

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