House market boom: First-time buyers hit by lending freeze now face rising deposits

The property boom in NI has left a “huge cohort of people alienated from ever owning a home of their own”, according a local housing association.
House prices are on the rise in Northern IrelandHouse prices are on the rise in Northern Ireland
House prices are on the rise in Northern Ireland

Mark Graham, who is the chief executive of Co-Ownership – an organisation which aims to help people onto the property ladder through, said first time buyers were at the mercy of a fluctuating house market.

He said that although house prices fell due to Covid, lending criteria tightened because of economic uncertainty and many first time buyers weren’t offered mortgages.

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And now that the property market has grown, first time buyers are struggling to meet bigger deposits for homes.

Mark Graham, chief executive of Co–Ownership, said Covid was doubly difficult for first time buyers due to lending uncertainty then rising depositsMark Graham, chief executive of Co–Ownership, said Covid was doubly difficult for first time buyers due to lending uncertainty then rising deposits
Mark Graham, chief executive of Co–Ownership, said Covid was doubly difficult for first time buyers due to lending uncertainty then rising deposits

Mark said: “If you own your own home house prices going up are a good thing, up to a point. But house prices going up if you’re a first time buyer, it just feels like the property ladder is getting further and further away from you.

“We know how home ownership benefits an individual’s health and wellbeing – and the economy – yet first time buyers continue to struggle to save deposits and compete with these rising house prices.

“What you really want is the housing market rising gently in and around the rate of people’s wages growing.”

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He believed house prices in Northern Ireland still remain comparatively affordable compared to other parts of the UK: “I don’t think we’re at crisis point, but clearly over the last year house prices have gone up significantly.

“The main challenge that brings for a first time buyer is deposits. You can get cheap mortgages because interest rates are really low but you still need to save for a big deposit these days.

“Of course having access to the bank of mum and dad, and/or a very good salary helps but there are a huge cohort of people alienated from ever owning a home of their own.

“The average property we’re buying is still around £130,000. But if you’re looking for a 10% deposit that’s still £13,000 – that’s still a lot.”

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He outlined how Co-Ownership – paying a mortgage on half of a property and rent on the other half – could help turn ‘generation rent’ into ‘generation buy’: “Over half our customers come from the private rented sector. If you’re paying £600 a month rent, saving enough money for a deposit can be a struggle.

“It’s also true over the last 10 years that you probably have to be a bit better off than you were to get home ownership because wages haven’t risen that high here. For this generation to become a home owner is a much greater struggle than it was for previous generations.”

He said Co-Ownership supports around 10% of NI’s first time buyers’ market each year and more than 1,000 people in the last 12 months alone.

Mark said: “Co-Ownership has supported 30,000 people into home ownership since it was established here some 40 years ago. 20,000 have bought out of their arrangements with Co-Ownership, proving that it is not only an affordable model but an effective one.”

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