Halifax issues warning to customers who are 'aged 35 and under'

Halifax has warned over half of under-35s admit to not feeling confident in the home-buying process, while six in ten feel “daunted” by the prospect of purchasing a property.

Halifax has warned there is a "crisis" in first-time buyers as they struggle getting on the property ladder. Halifax has warned over half of under-35s admit to not feeling confident in the home-buying process, while six in ten feel “daunted” by the prospect of purchasing a property.

61 per cent of first-time buyers also say they feel “priced out” of the market, it also found. Data shows there is also a knowledge gap, with over half admitting they aren’t aware of all the options available – such as Shared Ownership – that could help them get on the property ladder.

To help more people get on the property ladder, Halifax re-launched its Shared Ownership offer earlier this year, introducing a new lower lending threshold for a 20 per cent share in new-build properties. For those buying a home with full ownership and traditional mortgage lending, first-time buyer deposits are now an average £49,906 nationally, reaching £108,848 in London.

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When using Shared Ownership, the average deposit would be £23,973, or £31,460in London. Amanda Bryden, Mortgages Director at Halifax, says “For many, the challenge of raising a deposit to buy a first home is a bigger obstacle than the monthly cost of a mortgage. While there’s no ‘silver bullet’ to the difficulties first-time buyers face, alternatives like Shared Ownership could offer a more accessible way onto the property ladder, thanks to the smaller deposit demand.

“This makes it a great option for anyone who wants to buy, but has a smaller savings pot to start with, as they can work their way up to a larger share, known as ‘staircasing’, over time. Just as buying outright isn’t for everyone, there are aspects of Shared Ownership that may not be suitable and need to be considered – there will be costs related to maintenance and ground rent, as well as the role of your housing association when it comes to selling the property.

“Shared Ownership isn’t an option that a lot of people are currently using, with only 3% of first-time buyers choosing it as a way to get on the property ladder. Clearly, there’s more work to be done to ensure people who are trying to get on the property ladder understand the options available to them, especially while people feel uncertain about their prospects of buying. We would urge any aspiring homeowners, regardless of their financial situation, to consider the whole range of buying options when getting started on their search.”

Meryl Williams, 27, from Edinburgh, shares her experience of buying her first home via Shared Ownership: “Buying your first home can seem like a daunting task, I remember at the time being unsure about what options were out there for me. I first came across it when my local council were offering Shared Ownership with Halifax – discounted housing for those who were a first-time buyer struggling to buy a home on the open market.

“For my circumstances, this worked well as I was able to put in a lower deposit. The total cost per month is similar to renting the same house, but with Shared Ownership you can own the house eventually. I was really happy to have found out about this option, as the scheme helped me to get on the property ladder where otherwise I might have struggled.”