Financial concerns for prospective new home buyers

Industry News

Financial concerns for prospective new home buyers

by on Tuesday 17 May, 2016 in Industry News


A new report and survey ‘Why buy new? Home Buyer intentions and opinions’ by the House Builders Federation (HBF) has shown that financial concerns dominate the thinking of prospective new home buyers, especially in the under 35s.

84% of 18-34 year olds want to own their own home

The survey, carried out by YouGov of 2,000 people throughout Britian and published to coincide with New Homes Week 2016, shows that whilst 84% of 18-34 years olds still want to own their own home, there are huge financial obstacles to realising their dreams. 73% cited the difficulty of saving for a deposit; 69% property prices; and 53% the difficulty of getting a mortgage.  To compound the issue, the survey also showed that 25% of 18-34 year olds are unaware of government support for home buying such as the Help to Buy Equity Loan scheme.

Running costs are a key factor for young home buyers

And it seems that younger people are also more concerned than their elders about the costs of running a home with 67% of 18-24 year olds taking this into account when considering a house purchase compared to just 40% of 35-44 year olds.

New build homes are also more popular with the 18-24 age group due to the lower running costs (estimated at 50%). 55% of this age group would consider buying a new build home compared to just 23% of over 45s.

More than half the buyers of second-hand homes replace bathrooms or kitchens

The research also highlighted the amounts of money second hand home buyers spend on their properties with 47% of people spending over £10,000, and more than half incurring the expenditure associated with replacing bathrooms or kitchens. 13% spent of people spent over £40,000 upgrading their home. HBF estimates it costs around £45,000 to upgrade a second hand home to the standard of a new build.

Key highlights from the research include:

  • 84% of 18 – 34 year olds that don’t already own their own home aspire to do so.
  • When buying a new home, the most important considerations are: price (80%) and location (80%). However a greater proportion of younger house hunters – 67% of 18 – 24 year olds – take into consideration the running costs of a property, compared to 55% across all age groups.
  • The main obstacles for first time buyers trying to get on to the property ladder are saving for a deposit (73%), property prices (69%) and getting a mortgage (53%).
  • When moving home, the majority of people have to make improvements to both their kitchen (51%) and bathrooms (52%), with 70% saying that they also have to redecorate.
  • Only 1% of home owners said that they didn’t have to spend money to make improvements when moving house, with 21% saying they spend £1,000 – £5,000 and 13% admitting to spending more than £40,000.
  • 55% of 18-24 years olds said they would consider buying a new build home with just 28% saying it was not at all likely.
  • Overall 33% of people surveyed said they would consider buying a new build home with 46% saying it was unlikely.
  • 34% of people have never visited a new build home or a show home; whilst a further 27% hadn’t done so for 5 years or more.

HBF executive chairman Stewart Baseley said:

“In the midst of a housing crisis, the prospect of getting on to the property ladder can seem like a distant possibility to many people. But there are options available to today’s young people. Due to Government schemes buying a new build home is a real possibility for people.

“New build homes have so many great benefits, from the high build quality and brand new fixtures and fittings, to the low running costs and added bonus of a 10 year warranty. But the real benefit for many first time buyers is the affordability of the whole process.

“Schemes like Help to Buy really make home ownership an option for many who it would otherwise be an impossible dream. And once in a new build, everyday living in terms of running costs, bills and not needing to spend thousands on upgrades mean people can enjoy living in their new home and not have to scrape by.

> See the survey results in full

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