Up to 1.5 Million Regretted Not Buying Their Home in 2012

Feb 18, 2013, 04:00 ET from first direct

LONDON, February 18, 2013 /PRNewswire/ --

According to research by first direct 3.6% of UK adults, equivalent to over 1.5 million people, said their biggest financial regret of 2012 was not moving or buying a home for the first time.  This rose to over 8% amongst 25-34 year olds amounting to almost 600,000 people*.  

Whilst there was a 1% increase in property sales in England and Wales last year, only 640,000 properties were sold**, half the number of homes sold when the market was at its peak in 2006 (1.3 million sales).   When the number of homes sold in 2012 is compared to those who regretted not buying it's almost two thirds less.
 
Andy Forbes, Head of Retail Products at first direct commented:

"It's worrying that such a large number of people regretted not buying a home in 2012.  Buying a home is understandably a daunting prospect especially in these financially uncertain times, but at first direct we're committed to helping first time buyers overcome some of the obstacles to getting on the property ladder."

To help borrowers keep upfront costs down and overcome at least one of the barriers to buying a home, first direct offers a range of 'Homebuyer' mortgages.  Not only are these 'Homebuyer' loans fee free***, but those buying a property will only require a 10 - 15% deposit and can choose to fix their monthly payments for 2 , 3 or 5 years or track the Bank of England Base Rate for the duration of the mortgage.

To further encourage some of those who regretted not buying to take the plunge, first direct has compiled a list of tips to get on the property ladder.

  • Research how much you can afford to borrow to get a feel for the size of deposit you will need to save.  
  • Budget - plan your income and expenditure to understand how much you could save on a monthly basis to build up a deposit towards your dream home.
  • Don't forget the other costs involved in buying a home.  If all your savings are being put towards your deposit, consider first direct's Fee Free mortgages: no arrangement fee, no booking fee and no standard valuation fee - costs which can soon mount up.  A homebuyer could typically save over £1,600 with first direct's Fee Free Homebuyer mortgages****.
  • Consider a fixed rate mortgage if you want to know what your monthly payments will be whilst you find your feet.
  • Low deposit mortgages are becoming increasingly available in the market, so do your research to find the best deal for you
  • Remember to haggle on the value of your chosen property; vendors commonly build 10-15% in to their asking price and the worst that can happen is they say "no".
  • If you're not part of a chain and have a mortgage agreement in principle (AIP) you'll normally be in a much stronger position to have your offer accepted.  An AIP from first direct lasts for six months.

Notes to Editors

The 'Financial Regrets' survey was carried out by Opinion Matters between the 4thand 18th January 2013 for first direct and questioned 2002 people aged 18 and over.  Full survey results are available on request.

* UK population figures Mid-year 2011 from ONS http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-262039 
  41,766,418 18yrs+ in UK, 3.6% of this number is 1,503,591.048
  7,186,377 25-34 yr. olds in UK, 8.3% of this number is 596,469.291


** Property sales in England and Wales 2012 http://www.landregistry.gov.uk/media/all-releases/press-releases/2013/market-trend-data-december-2012

                                                           Sales
                                                            2011
                                  Sales 2012 (England &   (England
               Month                      Wales)          & Wales) Difference

    January                                        43,712   37,627    16%
    February                                       44,769   39,693    13%
    March                                          61,216   46,767    31%
    April                                          43,159   50,769   -15%
    May                                            52,322   48,995     7%
    June                                           59,433   57,735     3%
    July                                           58,627   62,321    -6%
    August                                         64,204   64,424     0%
    September                                      51,475   63,558   -19%
    October                                        56,337   57,988    -3%
    November (ave Jan - Oct)                       53,525   52,988     1%
    December (ave. Jan - Oct)                      53,525   52,988     1%
    Eng & Wales Total sales 2012                  642,305  635,852     1%


*** Fee free means:

No arrangement fee

No booking fee

No standard valuation fee

first direct will cover the cost of one standard valuation where this is required as part of the mortgage application.  Additionally, where it is a straight forward transfer from another lender, first direct also pays the standard legal costs.

Homebuying mortgage costs****

                                          Cost for                  Cost for
                            Costs for    FTBs with    Costs for    STBs with
                            first time  first direct second time  first direct
    Potential home buying     buyers      fee free      buyers      fee free
             cost          (FTBs)*****    mortgage   (STBs)*****    mortgage
    10% deposit (assuming
    90% LTV mortgage)      GBP15,959.80 GBP15,959.80 GBP22,943.50 GBP22,943.50
    Mortgage booking /
    arrangement fee ******     GBP1,498         GBP0     GBP1,498         GBP0
    Standard mortgage
    valuation report             GBP115         GBP0       GBP115         GBP0
    Total cost             GBP17,572.80 GBP15,959.80 GBP24,556.50 GBP22,943.50


*****At the end of 2012 the average first time buyer house price in the UK was £159,598 and second time buyers found themselves looking at an average cost of £229,435 from ONS quarterly house price index, Table 10 and Table 13 (All Dwellings)
****** Average mortgage booking / arrangement fee according to Which? 01/01/12 http://www.which.co.uk/money/mortgages-and-property/guides/how-to-get-the-best-mortgage-deal/mortgage-fees-and-other-costs/ 

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SOURCE first direct