The average first time buyer deposit in Bristol is now £45,000, according to new research by online mortgage broker Trussle.
The fact that first time buyers are finding it hard to navigate the property market at the moment is not unheard of, however the amount of money that’s held up most certainly is.
It’s estimated that their difficulty to enter the market is putting £5billion worth of property deposits in limbo, which is not only considerably slowing the market but potentially stalling its recovery as well.
Lizzie Stephenson, who comes from St Pauls and has been living alone in Bristol for the last couple of years, was keen to get onto the property ladder, but quickly realised the jaw dropping prices she would be up against.
She now owns a property which she managed to get through shared ownership. This means the purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share.
“I think shared ownership is a good system, but it is just plastering over the cracks in a broken property market,” the 26-year-old said.
Sixty nine per cent of would-be first time buyers are now priced out of the market and according to Ocean Finance, of the 50 towns and cities analysed, Bristol has seen the fifth highest price value change in 20 years.
In 2000, the average house in Bristol cost £137,742, but that has now risen to £291,839 – a staggering increase of 112 per cent.
“The key problem in Bristol is that property is far too expensive,” Lizzie added.
“The average salary in the UK is around £30,000 per year, but most lenders will only lend four times your salary, so most people are priced out of the housing market in Bristol.
“The shared ownership market in Bristol is also ridiculous.
“Some of the properties on there are priced at £140,000 to own less than 40 per cent of the flat, and the rent is extortionate.
“We need developers to start building genuinely affordable housing. Not luxury apartments that use shared ownership simply as a tool to get through the planning application affordability criteria.”
Lizzie first moved to Bristol from Newcastle nine years ago and says the city “very quickly became [her] home”, but she still believes that the house prices are frightful.
When discussing her wanting to get onto the property ladder, she said: “The cost of renting was so high and it felt like it was preventing me from being able to build any real financial security.
“I quickly realised that I was unlikely to be able to buy a flat on the traditional market, as on a salary of £28k I could only get a mortgage of around £112,000, which left me priced out of the city.
“So I started looking into shared ownership, which would enable me to buy half the flat and pay rent for the remaining share.
“I’d have preferred to be able to get a mortgage on a whole flat, but this enabled me to slowly build a stronger deposit through my regular mortgage payments.
“Most one bedroom flats were priced upwards of £160,000, and most of the flats in that price bracket were either really far away from the city, which would have created additional commuting costs, or cash only due to having a really short lease remaining.”
Bristol was recently named one of the fastest moving property markets in the UK and is ranked as one of the best places to live in the UK.
For retail supervisor Sophie Jones, that is definitely true, as she moved from Mountain Ash four years ago and has recently looked into settling down in the city with her partner David Thomas, 25.
The St Werburgh’s residents were both able to borrow money from their parents, but even with that, they didn’t have enough to be considered for a mortgage.
Sophie, 26, said: “We had a phone call the day before our appointment to potentially put a deposit down.
“But, they said because we didn’t earn enough together, there was no point in even applying.
“Even if you can get the deposit, they still expect you to earn a certain amount to be considered for a mortgage.
“We quickly realised we were just going to have to start saving a lot more ourselves.
“It won’t be years from now until we can afford somewhere.
“It’s gutting and disappointing.
“Simultaneously, renting is expensive too and people forget how much it costs for rent, agency fees and you move around a lot.”
She said they will begin looking for a new home again once they reach their thirties, but the couple would like to get a place before they have children.
Sophie added: “Shared ownership is a scam.
“There needs to be a new scheme for first time buyers.
“From a young age, we need to know about deposits and saving properly without their being a stigma around talking about money,” Sophie said.
“Make it more realistic for first time buyers”
First time buyers, Alex Smith and his partner Clare have just bought their first home in St Werburgh’s.
They began searching at the beginning of the year, but when lockdown hit, they began to notice how quickly the housing prices were increasing.
76 per cent of first time buyers feel worried, confused and angered at how Covid-19 has affected their home ownership aspirations, according to Trussle.
Alex and Clare’s search for a home started in Knowle, when at the beginning of the year, they spotted that homes were selling for around £240,000, but during the first lockdown, those gradually rose to £280,000.
When searching, their budget was £30,000 for the deposit payment.
Alex, 32, said: “We were worried when we started looking and it was really difficult.
Between them, during lockdown they managed to save £10,000 altogether and are now in the process of finalising it.
“We managed to find a two-bed home with an office in St Werburgh’s and even though it’s a mess inside, we never thought we could afford a home in that location.
“We’ll have to strip it all back as it’s a wreck inside, but at least we can make it our own.
“The one we bought is a mess inside but we never thought we could afford it either way,” he said.
To assist them, they got a mortgage broker and he encourages everyone who’s buying their first home to do the same.
“Young people definitely need more support when searching for a home because what many may not know is that building up money for the deposit is the hardest part.”
Naomi Thomas, a property lawyer from Horfield has been looking for a property in Bristol for the last few years intermittently.
She believes the logistics around shared ownership are too complicated and does not allow for the purchaser to take full ownership over the property.
“They need to reduce the prices to make it more realistic for first time buyers,” the 30-year-old said.
“Pitching the idea of homes selling for thousands of pounds to young professionals is insane.
“It’s not like being in London where your salary is increased.
“In Bristol you’re given a basic salary, no matter what your profession is. How are people supposed to get on the property ladder with that?
“And it seems like the more you wait, the higher the prices keep going up.”
She first moved to Bristol when she was 19, but she said an increase in housing prices is something she has noticed.
Naomi puts the increase in housing prices down to gentrification, a debate which has been circulating in the city for a while.
“It’s become really popular as a city and there are lots of areas which have had lots of money invested into them. Bristol didn’t look anything like this before.
“I think gentrification has definitely taken hold of the city, which inevitably means that those who have been living in certain areas for a long time, eventually just won’t be able to afford to live there anyway. I’m afraid it will lose its authenticity.”
Naomi is continuing to look for two-bedroom properties in Bristol.