Will the UK property market ever come back to first-time buyers?

As the price of UK property continues to move higher and higher there are now serious concerns that first-time buyers may become a thing of the past. Such is the relentless increase in the cost of homes up and down the country that more and more first-time buyers are now being priced out of the market even when taking into account the assistance offered by the UK government’s Help To Buy scheme.

More and more people are now experiencing an increase in the cost of living which is far beyond the increase in their household incomes. Indeed while the cost of living continues to move higher many people are indeed seeing a relative reduction in their household incomes. So where does this leave first-time buyers?

Will the market ever come back to first-time buyers?

At this moment in time it is difficult to see first-time buyers being in a position to acquire 100% of a property in the short to medium term. There are a number of “shared buying programs” which are attracting the attention of would-be first-time buyers but these opportunities see third parties putting down part of the cost of a property and then taking back their share of the profit in the future.

Quote from PropertyForum : “It seems that each week brings another question regarding the valuation of UK property with many experts certain that we will see a setback in the short to medium term.”

The UK government, current and past, has mentioned time and time again that there is a need to build more affordable properties up and down the country. The authorities are well aware that the UK as a whole is well behind the curve with regards to demand for affordable property when compared to supply. There have been suspicions for many years now that UK governments have deliberately held back the supply of homes in the UK to ensure a long-term upward curve in the value of existing housing stock. Rumour or the truth – we will leave you to make up your own mind……

Would a house price crash bring property prices more in line with household incomes?

At this moment in time it would take a phenomenal house price crash to see properties brought back within the range of first-time buyers today. Indeed, if the UK property market was to collapse then this would likely be part of an overall economic setback which would lead to pressure on the employment market and indeed a likely reduction in household incomes.

So, even if the UK property market was to crash, the relative reduction in household income would likely see the gap between first-time buyer finance and the cost of current housing stock remain relatively unchanged.

The future for first-time buyers

When you look at the demand for UK property, both from domestic and international investors, we are unlikely to see a major sell-off in the short to medium term. Indeed those looking at UK homes as investments for the future are to all intents and purposes pushing prices so high that natural first-time buyers are not able to enter the market.

In many ways first-time buyers are the lifeblood of the UK property market as they allow those on the property ladder to either upgrade or downgrade their homes. Whether pure investors, both domestic and international, take the place of first-time buyers in the medium to long-term remains to be seen but it is certainly a difficult environment in which to jump and manage to hold onto the first rung of the UK property ladder!