Research reveals lack of first-time house buyers in UK
Only a quarter of people planning to buy a home in the UK next year will be first-time buyers - a share which is still well below the levels needed for a "healthy" market, research has found.
Almost a quarter (22%) of these buyers will have raised a deposit of less than 10% by the time they try to make a purchase, meaning their range of mortgage options and their access to the most competitive deals will be very restricted, 187,937 warned.
The property search website found that first-time buyers will make up just 25% of people looking to buy a home in the next year, a percentage which is "well adrift" of the 40% share often seen before the credit crunch.
London has double the percentage of potential first-time buyers than most of the rest of Britain, with a 45% share, compared with just under 20% in Wales.
The housing market in London has consistently out-performed other regions, attracting strong overseas buyer interest amid the eurozone turmoil.
Raising a deposit remains the biggest concern for people trying to get on the property ladder, with 36% of people saying this is their main hurdle.
The study said it was hardly surprising that many frustrated first-time buyers will try to get on the property ladder next year with a deposit of less than 10% as two fifths of those with a deposit of at least 10% said they have been saving for five years or more.
The British government launched an £80bn (€100.2bn) scheme at the start of August which has helped to increase mortgage availability, although much of the strongest competition has been among lenders looking to attract people with larger deposits.
There have been some signs this week that the choice for people with lower deposits is improving, with the Co-operative Bank and Leeds Building Society both launching some market-leading high loan-to-value deals.
Concerns about finding a suitable first-time property to buy have grown sharply since last year, with almost one in three (29%) people saying they are worried about this, compared with less than a quarter (24%) a year ago.
The typical first-time buyer is looking to spend around £150,000 (€187,937), but the number of homes on the market in this bracket has dropped by 5% since last year, Rightmove said.
Researchers suggested the drop is due to a reluctance of people who could be looking to make their second step on the property ladder to put their home on the market.
Many potential "second steppers" were first-time buyers at the height of the property boom and are now stuck in negative equity.
The combination of low deposits and less choice on the market means that potential first-time buyers are also having to cast their nets wider in their property search.
More than half (57%) of those surveyed said they would expect to have to move more than three miles away from where they currently live, while 38% said they would be searching more than five miles away.
Housing Minister Mark Prisk said: "The government is taking action to help aspiring homebuyers take their next step on the property ladder - whether first time buyers looking to purchase their first home, or existing homeowners who want to move in order to meet their changing needs.
"Over 27,000 new homeowners are set to benefit from the FirstBuy scheme, which will help increase movement throughout the housing market.
"We have also made provision through the NewBuy Guarantee, the first scheme of its kind, to help tens of thousands of aspiring and existing homeowners purchase newly-built homes with just a fraction of the normal deposit, as little as 5%."
More than 16,000 people took part in Rightmove's survey.
Here are the percentages of people expecting to buy a home in the next year who will be first-time buyers, by region:
