Please Note: This Article is 5 years old. This increases the likelihood that some or all of it's content is now outdated.

At the Labour party conference in Brighton, labour announced it is to launch an investigation into home ownership and the building of more council homes.

The Minister over Housing and Planning Dr Roberta Blackman-Woods MP and her department have announced the appointment of Taylor Wimpey Chief Executive Pete Redfern to undertake “an independent review to analyse the root causes of this decline” and “set out the ideas needed for a wide new debate”.

The review will look into the causes of declining home ownership rates in the UK as it emerges that one-third of first-time buyers have not saved more than £10k for a deposit.

Speaking at the conference John Healey MP for Labour announced he has launched the review of declining home ownership rates in the UK.

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“We’ve done great things on housing before said Healey. Under Attlee; under Wilson; and under Blair too. And Labour councils lead the way on housing year in and year out, right across the country.”

Labour claims that with modest investment they will build 100,000 new council and housing association homes every year by 2020, reducing the housing benefit bill at the same time.

These comments come as the Conservative Government is criticised by Labour for its plans to extend the “Right to Buy” to housing association homes. Some experts predict we will see the number of social homes available plummet, if the government fails to build enough homes to replace them.

“I want Labour to carry the hopes of all those wanting – and struggling – to make a good life for themselves and their family. More than four in five of us, aspire to own our own home. Yet home ownership has fallen each and every year over the last five years… George Osborne was right to describe this decline in home ownership as a ‘tragedy’. But it’s happening on his watch,” Mr Healey said.

The Redfern Review as it is to be called will report next summer.

A recent survey conducted by First Time Buyer Magazine shows that around one-third of first time buyers in London have on average, less than £10,000 saved to buy their first property. Despite their lack of savings most still aspire to become property owners this year.

The magazine’s research which polled over 1,000 first timers also found that a further 29% of hopeful buyers have over £10,000 but less than £20,000 put away for a purchase this year. Young people are finding hard to save for the all-important deposit, but help is available given the forthcoming introduction of the Help to Buy ISA.

Lynda Clark, editor of First Time Buyer Magazine has said:

“When it comes down to it, the lack of deposit is the biggest barrier for most aspiring homebuyers today. Although we have recently seen a return of more 95 per cent mortgages through mainstream lenders, a bigger deposit saved will mean access to lower interest rates, therefore making monthly repayments more affordable. First time buyers need to make proper plans to save as ultimately it is the only way they will be able to take these first steps onto the housing ladder.”

The finance comparison site moneysupermarket.com says,

“Building up a deposit is one of the biggest hurdles of getting on the property ladder. Rising house prices have meant that those looking to buy their first home often need to put down tens of thousands of pounds as a deposit – which can seem impossible unless you’re earning a fortune, or are lucky enough to have family prepared to stump up the cash on your behalf.

“A sum of 5% of the property value is the absolute minimum you will need to put down and, even then, your choice of lenders and deals will be restricted. If you want to be eligible for a wider choice you’ll need a 10% deposit, while the really competitive rates only start kicking in at around a 25% deposit.”

How much of a deposit do first time buyers need to save?

The average house in the UK now costs £184,682 (August 2015 Land Registry), and prices increased by 9.8 per cent last year.  These prices vary considerably across the country, with the affluent areas like Kensington and Chelsea being the most expensive. To buy a property worth that sum, you’d need to save at least £9,234 which would give you the minimum 5% required by lenders.

Putting down 10%, which would give you access to cheaper deals, would require you to save £18,468, while a 25% deposit would mean getting together a whopping £46,170. And if you’re buying in London these percentages will be a lot more as house prices are higher still.

Please Note: This Article is 5 years old. This increases the likelihood that some or all of it's content is now outdated.
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