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Barriers to home ownership are shrinking

Barriers to home ownership are shrinking

Category: Mortgages

Updated: 13/07/2017
First Published: 09/12/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

If you've been thinking of taking that first step onto the housing ladder, you'll be pleased to know that barriers to home ownership are actually shrinking! Research shows that many hurdles to home ownership, such as raising a deposit and accessing finance, are easing, so hopefully you'll be feeling a little more positive about the whole thing.

Reduced barriers

Figures from the Building Societies Association (BSA) show that concerns over raising a deposit, which has been the biggest barrier to home ownership since 2010, has hit its lowest level for six years, with 52% of respondents now saying that it's a hurdle to overcome. This, of course, means that over half of prospective homeowners still find it an issue, but it's a welcome drop from the 59% who said the same in September this year, and is well below the peak of 69% in September 2011.

Not only that, but access to mortgage finance has improved for many over the last three months, with only 38% now citing it as a barrier, down from 41% in September. Affordability of monthly mortgage repayments has also improved (33% now cite this as a barrier, down from 35%), as has job security, with a lack of such security now affecting just 26%, down from 28%.

Improved sentiment

The results clearly indicate that sentiment towards home ownership is improving, with a growing number of people feeling confident that they'll be able to achieve their goal. Some of this could be the result of the focus on housing and first-time buyers in the recent Autumn Statement, the report noted, but overall economic improvements, not to mention a highly competitive mortgage market, could also be fuelling this confidence.

"The finding that major barriers to home ownership have fallen to a six-year low is great news for first-time buyers and instils greater confidence in the housing market," said Charlotte Nelson, finance expert at Moneyfacts. "Government schemes, such as the Help to Buy Mortgage Guarantee Scheme, have helped to foster a positive attitude, and the new Help to Buy ISA will only reinforce this outlook. This means consumers now feel a little more confident about gathering up enough cash to step on to the property ladder."

As an added bonus, the mortgage market for those with a modest deposit is "the best it has been in a long time", added Charlotte, with the number of products for those with a 5% deposit rising from 179 in December last year to an impressive 240 today, dramatically increasing availability for first-time buyers. Average rates have also fallen, with the typical two-year fixed rate mortgage at 95% loan-to-value now charging just 4.30%, down from 5.23% a year ago.

Time will tell if homebuyers' positivity lasts, particularly with property prices always seeming to be on the rise, but for now, it could be a great time to get in on the action. Start the process by checking your credit rating (by using credit check services such as Experian Credit Expert) to boost your chances of securing that all-important finance, and when the time's right, compare first-time buyer mortgages to find a deal that's right for you.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.