CML warns FTBs need more flexible options
Rising house prices, the growth of student debt and the desire of young adults to be increasingly mobile pose fundamental questions for policy makers trying to make home-ownership more affordable for the young.
Research published by the CML concluded that the most effective policies for providing affordable home-ownership would be those that offer the flexibility for young home buyers to take on only levels of mortgage debt that are prudent given their incomes and other financial commitments.
Higher levels of student debt are likely to make the transition into home-ownership slower and more challenging for young people. As a result home-ownership rates for young adults could fall further in the coming years.
Bob Pannell, head of research at the CML, said: “For today’s young adults, mobility for career and other reasons is an important factor. While home-ownership remains a long-term aspiration for the majority, the reality is that for many young people the combination of house prices and student debt is reinforcing a lifestyle choice in favour of renting.
“The CML remains keen to explore new ways of getting first-time buyers onto the property ladder where possible. The Open Market Homebuy scheme will be launched in October with lenders contributing to a shared equity loan. We hope this can be a platform for a more flexible approach and we urge the government to work with lenders to develop innovative ways of helping young people who want to buy their own home.”