Over half of first time buyers in the UK expect to reduce the wait to own their home by at least six months by using peer to peer lending, it is claimed.
A poll of customers by peer to peer lending service Zopa, found that two thirds aged 18 to 40 who don’t own a home are using it to help raise a deposit and over half expect it to reduce the time it will take to reach buy a home.
Some 34% of those surveyed said it will shave more than a year off the time until they can buy and a further 21% say it will reduce their waiting time by six months.
The poll also found that 22% are hoping to buy in less than a year, whereas 47% hope to purchase a home between one and three years’ time.
Of those looking to buy, over half are cutting back on clothes and other purchases and more than two out of three people are eating out less, going on fewer or cheaper holidays and choosing cheaper options for household essentials to boost their savings. In contrast, one in four people are making no lifestyle changes at all.
Of those who weren’t saving for a deposit, 33.8% said it was because house prices are too high and almost a quarter said they have other savings priorities at present.
The firm said it is alarmingly that over 40% of people are aiming to save a deposit of over £40,000, but this rises to 55% of people in London who are waiting to buy. This stands in stark contrast to those who brought 10 years ago, when only 2% of savers aimed for a deposit of £40,000 or above.
The survey also found that 18% are receiving help from government schemes, such as Help to Buy but 55% expect to receive no financial assistance from their families in reaching their deposit target.
For those first time buyers that have had financial assistance, the size of parental contributions is actually getting larger as deposit amounts increase. For those who brought their houses more than 10 years ago, only 8% of parental contributions were over £45,000. This percentage rises to 28% for people who brought less than a year ago.
‘Buying a home is a major milestone in many people’s lives and saving a deposit is getting harder each year as prices and the amount required increases,’ said Zopa’s executive chairman Giles Andrews.
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Source: Property News Spain