FTBs forgo electricity to buy home
An opinion poll from Your Move and Reeds Rains estate agents found that while 20% of first-time buyers were prepared to go without electricity, working plumbing and central heating a massive 77% of would-be homeowners would accept dated décor, a sub-par and an out-of-date bathroom.
Only 9% of respondents claimed they were unwilling to make any significant compromise when buying their first home – below the proportion of first-time buyers willing to accept a property with dry rot (12%) or one with a leaking roof (14%).
Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “As demand in the property market remains strong, first-time buyers are willing to accept a home in less-than-perfect condition.
“While the stats seem alarming at first glance, they’re a good sign for the housing market overall. The figures show that most would-be first-time buyers haven’t given up on the dream of property-ownership.
“Instead, they are sensibly adjusting their expectations and preparing themselves for some of the short-comings that may be present in a first home. Indeed, it may even be the case that some first-time buyers actively select properties with faded décor or faulty kitchens, judging that the reduction they can secure on the asking price is greater than the cost of any required renovation work.”
Large numbers of first-time buyers are willing to slash their outgoings to save up for a home.
When asked which of their expenses they would be cut in aide of becoming a home-owner, 69% replied that they would give up purchasing a new car, while 67% stated they would curtail their holiday expenditure.
Many first-time buyers were also ready to slash more day-to-day expenses. Almost two-thirds (61%) opted to slash entertainment expenses such as eating out and 56% went so far as to save on consumer purchases such as clothes.
Some were even prepared to put at risk their financial security in retirement, with 17% of respondents claiming they would sacrifice their pension contributions in aide of owning their own home.
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said while borrowers might say they are willing to compromise their lifestyles and the quality of the property it wouldn’t affect how lenders viewed their affordability.
He said: “The fact remains that lenders’ affordability tests make allowance for basic living costs including electricity and water – even if a borrower thinks they don’t need these utilities the lender won’t take that at face value.
“Additionally, there is a low risk that if a borrower did purchase a sub-standard quality property and needed to extend their expenditure for repairs following purchase, that they’d fall into arrears.
“Most people stop paying the electricity and bills long before they stop making their mortgage payments.”