Why Is It So Hard For First Time Buyers, Right Now?

Why is it so hard for a first time buyer right now? Property prices have surged, the cost of living crisis has taken hold and mortgage interest rates are at an all time high. We have a fundamental problem with house builders and tacky new build estates, but more the government not helping to tackle our supply issue. Instead focusing on incentivizing demand like the help to buy schemes only push property prices up further.

I explore why it's hard for first time buyers right now trying to buy a property.

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Timestamps
00:00 Intro
00:50 Mortgage Repayments Getting More Expensive
01:26 The Problems - Why It's Getting Harder
05:25 Help To Buy - Did it REALLY help?
06:50 The Good Signs Ahead - What Will Help First Time Buyers?
08:07 The Chronic Problem - Nothing Will Help First Time Buyers
09:57 Affordability is Key
10:58 Conclusion

WHO AM I:
I'm Matt, a senior product manager and property investor working Remotely for a VC-backed tech startup. I make videos about money, investing, tech and productively building a business.

GET IN TOUCH / BUSINESS:
If you’d like to talk, I’d love to hear from you. DM @mattbrighton_ on Instagram and I'll happily get back to you!

PS: Some of the links in this description are affiliate links that I get a small 'thank you' from, to help fund this channel. It also means you can get awesome deals with my affiliate partners! 😁

[Koi_Redd]

I've saved £30, 000 for a house deposit in the last few years using some outrageously strict budgeting and I still feel a world away from being able to purchase my first home. Prices are ridiculous just as much as the mortgages. As a 24 year old Welsh lad who earns a good salary in financial services, I can honestly say that the leadership in this country is letting generations of people down in so many ways, and this is one of the big issues - It's genuinely terrifying. I fear for my future and the future of everyone my age in this country.

[Dave-doke]

For some people working remotely, moving to another country is starting to look like a reasonable idea. Having come to the uk as an immigrant 10 years ago, I have been doing everything I can to stay here but prices r skyrocketing to the point a commute from spain/portugal to stansted is far cheaper than a train from ipswich to london for when you need to go office. Several of my colleagues who are of british origin are considering the same, which must be very difficult, as leaving your country due to financial reasons can be one of the most uncomfortable decisions

[jakeartis]

My issue with apartments is the ridiculous service charge that comes with the property. When you factor these in typically I could just go and get a house for the difference

[patricku]

Another great video. Completely agree, supply side policies are needed to fundamentally change. We don’t need more shoe box apartments , we need more liveable, quality alternatives to houses on the outskirts of cities.

[ArronMurray]

So, this is where I am. I am mid 30's, and decided to travel before buying a house. So now, eager to buy my first home, I have managed to save 40k for a deposit, but I am caught in a bit of a predicament. I am single, no wife, no kids, and my company is internet based. Meaning I don't require a physical location and have no ties to a fixed location. I am now looking to buy my first home for cash in Sweden. So it's either 5 acres of land, a detached 5 bedroom house for 40k (no mortgage), on a lake, and with a big city within an hours drive, or a two bedroom mid-terraced that needs work for minimum 110k (I'm in Cardiff right now). Go figure...

[redmed]

Last 30 years have seen homes being seen as an investment rather than somewhere to live. So many TV programmes were about increasing the value of your home and there's no point in paying to improve your home if you don't eventually sell it to see the profit.
Average wages have fallen so far behind average house prices there is no hope of them ever catching up in the next 50 years because that's how long it's took to get to where we are now. I feel so sorry for 20 year olds now because it's going to be so tough for them for most of their lives.

[Matt-zqjb]

A huge problem in London is developers marketing and selling an entire new build block to foreigners overseas which just inflates the house prices even more and British people then can’t afford a house in their country

[lukebowler]

On the site im currently on we've been told our prices will drop 6% as the company isnt selling houses quick enough... well they cost roughly 100k to make and they sell them for 500k... reduce the price by half, force the prices to drop, and dont drop the builders pay as all thatll do is result in worse worksmanship...
Im a builder who can average 50k a year and i cant remember the last building site i was on which sold a house i could afford...

[GrouchyMonk]

It's interesting that this phenomenon has been happening in North America and Europe. It almost seems as though there is a concerted effort (by whom, I do not know) to ensure the next generation never owns a home. Skyrocketing inflation in housing coupled with high interest rates and stagnant wage growth would seem to indicate that the have nots will always be have nots. And as inflation increases in mortgages, rents and everything else are going up, too. Dangerous and violent times may be ahead. No wonder so many of the 1% own homes in, and are citizens of, more than one country.

[lukebowler]

As a builder that "new build premium" is true... but one of the biggest scams about.... there isnt a new build thats been built in atleast a decade that would stand up to a 60 year old house here in the uk... new builds are built cheap, cheap materials, small gardens, they fall apart...
Literally having to sort timber on site as you can punch through half of it... and thats for the internal walls

[PreparedDeath]

The help to buy scheme was designed to help house builders to sell not home buyers to buy, even worse It allowed them the opportunity to charge the difference over the prices in the same area (eg, average house price near me is £180k, the cheapest house on the new estate nearby is £280k)

[ravenouscorax]

I'm 41 and the "cheapest" place near me which I could afford is 25% shared ownership costs £106, 250 & the monthly rent would be £664. A problem is the damn mortgage would be around £575. Working it out and that's around 70% of my take home pay not counting bills. I live at with my mum near oxford so many would call me a failure as I haven't got my own place. I could just get a fairly luxury tent for £200 but i would probably get an ASBO from the local authority's. The government is really screwing whole generations with their inability to offer some help.

[gemalem]

We've just bought our first house June last year and it was bloody hard work!!! The house was under valued by £20k so we had to drop our 20% deposit to 15% to free up money to make up the difference... And even though we were borrowing a lot less we actually have to pay more per month on the mortgage 🙄 dreading in 5yrs when we have to reassess our mortgage

[Mogamishu]

In the UK if something is not taxable, it is probably illegal.

[Tina_Fay]

I had a suspicion the house I was looking at was overpriced at market rate even with the first home discount, this just confirms it and glad I wasn’t risking negative equity if I went ahead and bought the new build at a premium

[Palazzo_of_Bone]

We bought our first house in November 2021, borrowing £290k at 2.2% fixed for 5 years. It's crazy how quick rates have jumped.

[apeter]

The trouble is low interest rates everywhere has made the prices shoot up everywhere. The politicians clearly knew that it would increase asset prices but they were quite happy about it as that would keep their core voters happy. Younger generation is quite indifferent to politics and don't vote hence they can easily be ignored. The trouble is people don't see the downsides of higher property prices once they buy and want it go higher and higher. It is quite bad for the next generation who have wait longer and earner higher, people have to wait until 35-40 to buy one and start a family which is bad for nation due to lower or negative birth rate, less money to spend elsewhere after paying for mortgages ruining economy with that money sitting with the big banks.

[Gollumfili]

Also I know its their job, but I hate that estate agents etc will falsely report that house prices are going back up, the demand isn't there because everyone is broke. There's doing your job and then there's outright lying.

[MartinB_Art_Design]

It's just never going to happen for me, our family has never owned a home and even if I budgeted to high hell, my rent fully prevents me from saving enough to even make a dent.

[samroberts]

Agree on most points aside from the positives surrounding flats. Non-investors looking to purchase flats run risk of high service charges and flat out rejection from lenders as many landlords aren’t prepared to cap ground rent. Having gone through this myself and seen it happen to others, don’t be fooled into thinking purchasing a flat is a smarter financial decision. IMO houses are still the way to go.