'Trapped renters' may never buy

Housing estateFirst-time buyers will remain an "endangered species" in 2012, with more than half of them requiring deposits of at least £20,000, Rightmove has said.

Less than a fifth of buyers in many areas of Britain will be stepping on to the ladder for the first time, well below the pre-credit crunch level of around two-fifths, or 40%, according to the property website's confidence survey.
London is the only area where the proportion of first-time buyers is predicted to stand at a "healthy" level of more than 40%, dropping dramatically to 23.6% for the West Midlands, which is in second place.

The survey also found the average age of a first-time buyer next year will be 32, while "trapped renters" - those who want to buy but cannot afford to - are typically older, aged around 35, and may never achieve their dream of buying a home.

Miles Shipside, director of Rightmove, said: "The first-time buyer remains an endangered species. They perform an essential role at the foot of the property market food chain in allowing sellers on the bottom rung of the housing ladder to trade up, and this makes them highly-prized."

Lenders have been expanding their ranges for first-time buyers by offering rates requiring lower deposits, but there have been complaints that the terms of some of these deals are too restrictive.

The study found that 56% of those hoping to make their first house purchase expect to be putting down a deposit of £20,000 or more.

Raising a deposit was the biggest worry among would-be first-time buyers, with more than a third expressing concern about this.

The report suggested first-time buyers were more likely to be looking for a knock-down deal, with 61% stating house prices in their local area are above what is fair and reasonable, compared with 47% of those who already own a home.

Housing Minister Grant Shapps said: "It's absolutely right to say that the doubling of house prices in the decade from 1997 blocked an entire generation from the housing ladder.That's why I've announced a new scheme that will mean rather than someone having to save £40,000 as a deposit, £10,000 will get them into their first home."
© 2011 Press Association
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