Whatever happened to the likely lads (and lasses)?
By Brian Smith, Partner
Are we seeing the likelihood of a missing generation in the property market?
The latest Bank of Scotland statistics relating to First Time Buyers in Scotland make for interesting reading. The following came out from their own figures:-
1 the number of FTB’s in Scotland is at its lowest level for 35 years
2 the average age of a FTB is 29
3 the average deposit required by a FTB was almost £24,000
4 the average house price was affordable for someone on average earnings in 77% of local authority areas in Scotland in 2011.
This tells us that whilst housing is affordable again in most areas, FTB’s are not being encouraged to dip their toes in the water. This must be due to 2 factors - inability to raise deposits at the levels required and lack of any or sufficient employment opportunities for young people.
It is likely many will remain in the rented sector long term either through choice or necessity. It may not be until they inherit wealth from parents or other relatives that they feel able or confident to enter the housing market.
This situation is unlikely to change until confidence returns in the economy in general and the housing and employment markets in particular.
This will continue to hold back the recovery of the market, especially at the lower ends. However it must also fuel demand for rented property. Allied to lower capital values that means more attractive yields which make Buy-to-Let an attractive option for investors, particularly with more lenders coming back into that market.
Are we seeing the likelihood of a missing generation in the property market?
The latest Bank of Scotland statistics relating to First Time Buyers in Scotland make for interesting reading. The following came out from their own figures:-
- the number of FTB’s in Scotland is at its lowest level for 35 years
- the average age of a FTB is 29
- the average deposit required by a FTB was almost £24,000
- the average house price was affordable for someone on average earnings in 77% of local authority areas in Scotland in 2011.
This tells us that whilst housing is affordable again in most areas, FTB’s are not being encouraged to dip their toes in the water. This must be due to 2 factors - inability to raise deposits at the levels required and lack of any or sufficient employment opportunities for young people.
It is likely many will remain in the rented sector long term either through choice or necessity. It may not be until they inherit wealth from parents or other relatives that they feel able or confident to enter the housing market.
This situation is unlikely to change until confidence returns in the economy in general and the housing and employment markets in particular.
This will continue to hold back the recovery of the market, especially at the lower ends. However it must also fuel demand for rented property. Allied to lower capital values that means more attractive yields which make Buy-to-Let an attractive option for investors, particularly with more lenders coming back into that market.