“Most importantly though, we need greater support and awareness for the wealth of schemes still available to borrowers, such as Shared Ownership, First Homes and Deposit Unlock.
“In our business, Shared Ownership in particular has been a real front runner since the closure of Help to Buy, providing an opportunity for both first-time buyers and newly-single individuals to buy their own home with a small deposit. Low deposit schemes such as these, and guarantor-style solutions, have to be a priority in the current climate.”
Indeed, house builders have experienced increased material costs and a shortage of labour, notes Hiten Ganatra, managing director at Visionary Finance. Meanwhile Skipton Building Society has just this week launched a deposit-free mortgage.
House building also declined at its sharpest pace for almost three years in April, according to the S&P Global/CIPS UK Construction PMI, with respondents commenting on delays to new house building projects, constraints on demand from softer market conditions and higher borrowing costs.
Bridging the generational divide
Significant wealth gains for property owners is the flip side of the affordability crisis, a report for policy discussion forum Whitehall Group notes, giving outright homeowners access to the beneficial capital growth that is the cause of reduced affordability of housing.
Although the wider market will be encouraged by resilient house prices, Doughty adds it is not so welcome news to those struggling to make their first move.
After seven consecutive falls, April saw a 0.5 per cent rise in house prices according to Nationwide’s house price index, which the building society’s chief economist Robert Gardner described as “tentative signs of a recovery”.
But Danny Belton, head of lender relationships at Legal & General Mortgage Club, highlights that while long-time homeowners have benefited, many are also trying to help the younger generation by way of the ‘bank of mum and dad’.
Equity release provider Canada Life has estimated that £616bn of housing equity is available to homeowners aged 55 and over.
On the other hand, new first-time buyers are paying nearly £200 more a month on their mortgage than last year, due to a new record average asking price and higher mortgage rates, according to analysis by Rightmove.
As Cook at Savills also notes, how older homeowners choose to deploy their equity could shape the market for the next generation.
Chloe Cheung is a senior features writer at FTAdviser
