Pragmatic strategy for first-timers

Would be first-time buyers are more optimistic about their ability to buy a property, new figures reveal.

10:14 26 September 2005

Would be first-time buyers are more optimistic about their ability to buy a property, new figures reveal.

A survey has found that non-homeowners hope to get on the property ladder by finding properties priced below the national average, with many raising their deposit by living rent-free with parents.

The survey by Alliance and Leicester (A&L) found that non-homeowners were more optimistic this quarter about their ability to buy a home. Some 22 per cent responded that they could not afford to buy, down from 28 per cent last quarter.

Analysts from A&L suggest that the recent base-rate cut may have contributed to the increased optimism.

However, it appears that would-be buyers are adopting a pragmatic approach to entering the property market, with affordability "first and foremost" in their minds.

Some 75 per cent of would-be first-time buyers hoped to spend below the national average, with just 15 per cent estimating they would spend between 184,000 and 250,000.

People are also increasingly likely to live, possibly rent-free, with parents while they save for their own home. Some 25 per cent of people in their twenties were choosing to stay in the family home, with men twice as likely as women to do so.

"Living at home with parents provides a chance for those wishing to get onto the housing ladder to benefit from no, or low rent, while enabling them to kick-start their savings for a deposit towards a house," said A&L's director of mortgages, Stephen Leonard.

The survey found that the average age of a first-time buyer was 34. However, the results caution against concluding that this is solely the result of financial constraints, with half of non-homeowners in their thirties reporting that they did not want to own a property.