Optimism among first time buyers is slowly returning, according to the Post Office, with one in eight surveyed recently hoping to buy their first home in next five years.
Research by the Post Office found that nearly a quarter of first time buyers plan to buy in 2013, saving an average deposit of 16%, while 14% expect to buy in 2012.
"First time buyers are the life blood of the property market and our research shows that challenging stories about first time buyers and wider economic issues have not dampened aspirations to get on the housing ladder,” said Mike Cook, Head of Mortgages at Post Office.
“It is also interesting to see that despite the resurgence of 10 per cent deposit mortgages recently, the average first time buyer is aiming for the cheaper rates available at 15 or 20 per cent deposit - even if it takes that bit longer to save."
In terms of financing their first property purchase, 45% of those surveyed say they are confident they can fund the deposit by themselves. The rest are using a variety of ways to build the deposit, ranging from donations from parents to using money from their inheritance.
Here’s how first time buyers are saving for deposits:
- Saving the whole amount by myself (45%)
- With the help of my partner (28%)
- With help from my parents (16%)
- Using the Government's FirstBuy scheme (16%)
- With money from an inheritance (10%)
- With help from another family member (7%)
"With the end of stamp duty exemption for homes costing below £250,000, first time buyers will now have to find the money for stamp duty as well as their deposit. It appears that for the majority would-be buyers the good old savings account comes to the rescue with the rest receiving a helping hand from family and the government,” said Mike Cook.
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