A while back, you may remember, I wrote about how difficult it was for first-time buyers to arrange a mortgage in this economic climate without resorting to The Bank of Mum and Dad. Coincidentally, around then I found myself reading a report from the Home Builders Federation entitled "Broken Ladder - a Report into the Affordability Gap Faced by First Time Buyers".
The HBF tells us that first-time buyers in London in their twenties need to save around 60% of their take-home pay every month for the next five years to afford a deposit on a home of their own. They could speed the process up by continuing to go to work day in, day out - but without spending a single penny. For only two years. That means no rent, no transport, no food, drink or any kind of entertainment. Rather a lot to ask from someone in the prime of life, yes? If, though, those first-time buyers have made it up a rung or two from the bottom of their career ladder, things might just be slightly easier for them when it comes to placing their foot on the bottom rung of the housing ladder.
In theory, the amount they'd have to save would only be 35% of their take-home pay every month for the next five years... but in practice, if they're renting as well as saving that would account for 110% of their net monthly income. So why were we not surprised at the fact that nearly 30% of men and 20% of women aged between 20 and 34 were still living at home with their parents when the HBF published their report in October 2010? And that the average age of the first time buyer who had managed to raise a deposit without help from The Bank of Mum and Dad was a ripe old 37? But that was then.
The average age of the first time London homebuyer, according to LBC Radio, is now 43. That is an extraordinarily long time to have to wait for a home of one's own - even if the deposit itself is only 23%. The Chancellor confirmed in his budget speech that he would be launching a 250,000,000 shared equity scheme. First time buyers will qualify if, between them, they are earning less than 60,000. They would then be entitled to a low interest loan (and interest-free for the first five years) so they could put down a deposit totalling only 5% of the value of the property they wish to buy.
If nothing else, it's a start. Quite a good one, but there's still a long way to go: what we need to work on now is a similar but much larger scheme to enable everyone - of all ages - to put a deposit on a home and get themselves up on the first rung of the property ladder without having to depend on The Bank of Mum and Dad.
Home buyers don't bother to traipse into estate agency offices these days. 90% of them search for property on the web. eMoov, internet estate agents, cover the whole of the UK but save money by not having hundreds of properties which you otherwise end up paying for in high estate agents fees. eMoov are online estate agents and ten times cheaper than the High Street.