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Property Purchasing 'getting Worse' For Graduates
By Steve
An increasing number of graduates are unable to afford to take the first steps on the property ladder, new figures report.

In research carried out by Scottish Widows, some 56 per cent of those who have finished higher education are yet to buy their first property - an increase of three per cent from the same study carried out last year. Meanwhile, an estimated one in four people who graduated ten years ago are reported to not be on the housing ladder.

Statistics from the financial services provider revealed that increasing property prices were the main reason for graduates being squeezed out of the housing sector, with 70 per cent of non-homeowning graduates, an increase of six per cent from the 2006 study, citing this factor. According to the firm, the average home costs a typical graduate first-time buyer 122,045 pounds, with this figure increasing to 179,228 pounds for those living in London.

Richard Clark, head of product development and marketing for Scottish Widows, said: "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 that deposit and recent interest rate rises are acting as a further deterrent. Owning a home is likely to remain a pipe dream for many."

Meanwhile, just under a fifth (19 per cent) of respondents claimed that if they were to buy a house then would be likely to be unable to make secured loan repayments. Some nine per cent of graduates were said to believe that money owed from their student loan is stopping them from getting on the property ladder,

as one in eight claim other debts accrued on the likes of personal loans and credit cards are preventing them from buying their first home. Overall, graduates were said to be in debt of some 10,361 pounds upon leaving higher education. More than half (58 per cent) of consumers who have recently completed university believe that they do not currently earn enough money to allow them to enter the property market.

Mr Clark added that the company had witnessed a rise in popularity of 100 per cent mortgage products and those graduates looking for financial aid from their parents. Although the expert welcomed moves by the government to make property affordable for prospective first-time buyers he claimed "there is still much to be done to make the market more accessible". His comments come after the financial services firm reported that 15 per cent of first-time buyers claimed that removing the need for a deposit would help them buy a home, with 13 per cent stating that purchasing a home would be easier if lenders consider their future earning potential rather than their current income.

Earlier this month, a study conducted by mform revealed that 2.08 million consumers aged under 35 are looking to take out a mortgage worth at least quadruple the amount of their annual pay. The research also showed that 828,000 are willing to opt for a secured loan at four times their salary. Marketing and business development director Francis Ghiloni claimed that as house prices continue to increase those aiming to get on the property ladder "will have to take on huge debt".

Article Source: http://www.article-outlet.com/

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