A fundamental shift has occurred in the first time buyer (FTB) market, if research from GMAC RFC is to be believed.
The lender claims lifestyle factors are taking on as much importance as affordability.
Although raising a deposit for a property is still the single biggest factor preventing FTBs from entering the property market - with 48% of people in this sector of the market claiming to have difficulty in raising the money - cultural attitudes towards settling down, getting married and starting a family are also taking on greater importance for 44% of respondents.
GMAC says government and lender initiatives aimed at tackling affordability issues may never be able to change this shift in attitude either. It says the rise of widely available and good quality rental properties means consumers have greater choice on how they live their lives with many people deliberately deciding to delay making long term commitments to house purchase.
The research claims over half of respondents (53%) say they are comfortable with delaying buying a property until they are over thirty, while 71% associate buying a property with ‘settling down’.
The lender says the cultural trend towards postponing big life commitments is most common among graduates who are entering the workplace later and using their incomes to fund “high maintenance hedonistic lifestyles.” Widely available rental property and wanting to live near friends are now also key factors when deciding to rent or buy.
Flexibility has become more important with 72% of FTBs believing renting gives them the option for future travelling and 72% saying it allows them to change jobs more easily.
The research also suggests the FTB share of the market (28% last year) may never return to previously high levels, where 50% of all those buying a home were those seeking to get onto the first rung of the property ladder, because of this cultural shift.
Stephen Knight, executive chairman of GMAC RFC, says the lender conducted the research to gain a better understanding of why fewer FTBs were entering the housing market. “It is important to understand that there are other important influences affecting this group other than the straight forward affordability issue,” he adds.
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