According to the recently published fourth annual Graduates First Time Buyer report, one in ten graduates believe they will never be able to afford to buy their own home. But that statistic doesn't just apply to this year's graduates: almost 25% of those who have graduated ten years ago are still without a foothold on the housing ladder, instead continuing to reside with parents or living in rented property.
With graduates sporting an average debt of �10,361 when leaving higher education, they are hard-tasked to first eliminate that burden and also save the average house deposit of �16,666 before they can even think of buying property. Add those challenges to the fact that the average house price is now over eight times the average UK salary, and it becomes obvious why so many graduates have given up any hope of ever owning their own home.
Richard Clark, Head of Product Development and Marketing at Scottish Widows Bank - the author of the report - expressed his concern when he commented:
"This year's report reveals that the situation really is getting worse for graduates. The main issue is that property prices and inflation are continuing to rise, but starting salaries have not moved in line with this. First time buyers are struggling to save for a deposit and recent rate rises are acting as a further deterrent. Owning a home is likely to remain a pipe dream for many."
However, despite Clark's pessimistic words, many lenders offer 100% or more mortgages, removing the need for a deposit meaning that graduates can still get on the property ladder if they club together with a friend or partner. Indeed, 63% of graduate first time buyers have bought a property with a partner, although on the downside 69% of them would not have the ability to buy them out in the event of a split. With property prices accelerating the way they have over the last ten years, buying with a partner may be the only option for most graduates at the moment.
However, cheerier news for graduates has emerged this week in the form of a Nationwide Building Society price index for June 2007 which shows that property prices have stalled, with a recorded rise of only 0.1% during the month. And with anecdotal evidence suggesting that estate agents are advising sellers to be more realistic with the prices they expect from selling their property, it may not be all bad news for graduates looking to buy property. Instead of the prospect of forever having to rent property or live with parents, there may just be light at the end of the tunnel.
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