Tuesday, 20 March 2012 11:10 AM
First-time buyers found it only marginally easier to buy in 2011 despite falling house prices, says the Royal Bank of Scotland.
The bank’s ability to buy index improved by just one per cent across the UK as rising earnings and falling prices were all but cancelled out by a big rise in living costs.
Average mortgage payments for a first-time buyer household fell by £20 a month over the year from 53 per cent of discretionary income to 51 per cent.
And they faced saving for 35 months to get a 10 per cent deposit in the fourth quarter of the year, one month less than in the third quarter.
First-timers saw their ability to buy improve most in Northern Ireland, where house prices fell 14 per cent, and deteriorate most in the East of England, where prices rose eight per cent. Their ability to buy also deteriorated in the North West, Scotland and London.
Fionnuala Earley, RBS group chief economist, said: "The government’s NewBuy scheme will underwrite buyers of new-build properties who have a minimum five per cent deposit. But at around £10,000, even saving a five per cent deposit will be a hurdle for those in London and the South East of England.
"On top of that, the end of the stamp duty holiday will hit this same group of FTBs who are already the most stretched. They will face a stamp duty bill of more than 10 per cent of their annual discretionary income."