Articles -> Graduate Homebuyers

Getting on the property ladder

With the recent slowdown in house prices, it has become slightly easier for graduates to get on that first step of the property ladder, however it is still a significant financial challenge to do so. Roughly two-thirds of graduates believe that house prices are too high for them to be able to afford, while still a large proportion, it is significantly down on the nine-tenths the year before.

One of the biggest barriers to graduates being able to afford house purchase is the paying back of the debts that they amassed during their time at university. Almost half of all graduates find that meeting the repayments takes up a significant amount of their disposable income, leaving them with too little to meet the kind of repayments a mortgage would require.

Mortgage lenders are responding to the problems caused by high house prices, and many now offer mortgages that require smaller deposits and which offer amounts in excess of the standard three times the borrower’s salary.

Those graduates who do now own their own home have generally had to turn to family or friends for some financial support, and/or downsize their property aspirations to more realistic levels. The old adage of ‘location, location, location’ seems to hold true, as most have chosen to opt for a smaller property in their desired place, rather than look elsewhere for the size they wanted.

Although things are getting easier for first-time buyers, many graduates believe that more could be done by the lenders, for example taking into account their potential future earnings, lessening the amount of deposit required or increasing the limit to four or five times their salary.