Fears of divide for ‘property haves and have-nots’

The current generation of 25 to 36-year-olds, the traditional age group for first-time buyers, is split into “property haves” and “property have-nots” who face very different prospects, the research from HSBC suggests.

While younger people who have managed to get on the property ladder did so typically at 29, the “have-nots” do not expect to buy their first home before the age of 35, according to the report, based on a survey of 1,000 people in this age group as well as figures from various sources.

Researchers predict this six-year head start for the first-time buyers could have a variety of knock-on effects for people throughout their lives – including the level of financial support they are able to offer their own children when they want to buy their first home.

Commenting on the findings yesterday, Coun John Blackie, the leader of Richmondshire District Council, warned it was vital young people had access to affordable housing. “Quite clearly it’s an extreme concern in the more rural and deeply rural areas.”

He said the “holy grail” was to ensure that communities in the Dales had a mix of people of all ages, including families, to ensure that services such as schools and shops remained and to ensure there were people able to work locally.

Otherwise, he said: “You end up with communities where homes are second homes.”

The report, titled First Time Buyers: The New Property Path, suggests those who have already bought a starter home will take their next step on the property ladder and buy a family home at around the age of 36.

If those who are not yet on the property ladder see a similar time lag, they will be about 42 by the time they are living in a family-sized home.

With the current average age for a first-time mother being 28, the report said that many people will have either had their family before buying their first property, chosen to delay starting a family or decided to have fewer children.

Current property owners aged between 25 and 36 are likely to pay off their mortgage aged around 61, whereas the “have-nots” will be about 67 by the time they are mortgage free, the report said.

It said: “Despite the planned increases to the state pension age, the average age people in the UK expect to retire is 65.

“This raises the issue of delayed retirement as well as them being unlikely to be in a position to gift their children money for property purchases.”

The children of the “property haves” are likely to be in their early 30s by the time their parents have paid off the mortgage and will 
potentially have more of a chance of getting financial support 
from their parents, the report predicts.

Various studies have reported first-time buyers returning to the housing market in their strongest numbers in recent months since the financial downturn took hold, amid the launch of various Government support schemes such as Help to Buy.

Pete Dockar, head of mortgages at HSBC, said: “Home ownership continues to be an aspiration for the majority of young people.

Housing Minister Kris Hopkins, MP for Keighley, said yesterday: “We’re determined to ensure there’s help available for anyone who works hard and aspires to own their own home.

“That’s why we’ve introduced the Help to Buy, which offers a valuable alternative to the bank of mum and dad by enabling people to buy with a fraction of the deposit they’d normally need.

“So far, Help to Buy is helping over 28,000 people become homeowners, with the numbers of first-time buyers now at their highest since 2007,” he added.

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