Over half of prospective first-time buyers say that they would use the government’s Help to Buy scheme to help them compensate for having small deposits, according to research by Ocean Finance.
The scheme is also having a positive effect on the savings on parents who would normally be counted on to fill the gaps in their children’s savings. The survey of over 2,000 adults showed that only 14% of them are planning to borrow from their families to finance their first property.
On top of the half of first-time buyers who plan to use the Help to Buy scheme, 22% plan to boost their savings further with a Help to Buy ISA.
Of the first-time buyers surveyed, many reported facing a number of obstacles when it came to securing a mortgage. 40% stated that the main barrier was being able to save enough money for a deposit, while others placed rising house prices and tough affordability checks at the top of their list.
Gareth Shilton, Ocean’s spokesperson, said:
“Too many first-time buyers have been frozen out of the housing market because they couldn’t save the 25% needed to get the best deals and make their mortgage affordable.
“The big question, of course, is what will happen when the government steps back from supporting schemes to get the housing market moving. House builders and lenders need to be having conversations to see how they can work together to ensure the momentum isn’t lost.”