By Daniel Hunter
Almost two in three young adults plan to buy their first home or move house under the Help to Buy scheme, according to Mortgage Advice Bureau.
More than one in three adults below the age of 30 have ambitions to buy their first home before the end of 2016, while more than one in four plan to move house.
It is young adults who show the biggest change in attitude towards property purchases as a result of Help to Buy, in line with the government’s aim to support first-time buyers.
Almost one in three 18-29s are more likely to buy a new-build home now that government support is available, compared with one in seven of all adults. The Help to Buy equity loan has already impacted activity in the new-build market with an estimated 12,500-plus reservations in its first five months.
The new Help to Buy mortgage guarantee — offering loans of up to 95% — is available on all property rather than just new-build homes. One in five young adults already say they are more likely to buy a 'second-hand' home as a result of Help to Buy, compared with one in ten of all adults.
Homeownership remains an important goal for nearly four in five UK adults with over half feeling it is very important. And there is little sign of the younger generation abandoning this goal. Below the age of 60, four out of five 18-24 year olds feel the strongest that homeownership is an important goal.
“It’s clear that consumers are crying out for better access to mortgages and the second part of Help to Buy — the mortgage guarantee — brings existing properties into play alongside newly built homes. It means the appeal of government support will extend to a wider audience which can only help towards fulfilling homeowning ambitions,” said Brian Murphy, head of lending at Mortgage Advice Bureau.
“There is a big difference between an equity loan and a 95% mortgage, so anyone looking to buy needs to understand the pros and cons to decide which option suits them best. The Help to Buy guarantee will ultimately improve the availability of genuine, affordable 95% mortgages.
He added, “Raising a deposit is the biggest challenge buyers face and the guarantee will help them over this initial hurdle, leaving them with monthly payments they can afford. It will also mean homeowners with limited equity have better prospects of moving up the property ladder, which in turn frees up more homes for first-time buyers.”
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