The third annual Scottish Widows Bank Graduate First Time Buyer report has provided the starkest assessment yet of the current plight of graduate first time buyers with over half (53%) of today's graduates still unable to get on the property ladder. Year on year the results paint a bleak picture for graduates with this year's figure two per cent higher than last year's.
Even for those graduates that have succeeded in getting on the property ladder, almost two thirds bought with a partner, and if they were to split up, 68% would not be able to buy their other half out. This rises to 75% of women. Looking at the number of people that have graduated over the last five years - 819,527 would have bought with their partner and 557,279 wouldn't have the ability to buy their partners out. For the majority of graduates (64%) it's unaffordable house prices that prevents them from getting on the ladder. This is not surprising when you consider that the average property price for graduate first-time buyers is £107,070, rising to £168,446 in London. This figure has been consistent year on year as the greatest barrier to getting on the housing ladder. The following reasons were also cited:
* 60% of graduates believe they do not earn enough to get them on the housing ladder;
* Almost a third just cannot save for a deposit;
* One in seven believe they are just not ready to make the commitment.
With the average deposit for Graduate First Time Buyers currently at £16,218 (rising to £30,184 in London) buying a home is likely to remain an unrealistic dream for many. Debt is also an issue. The average student loan debt is £9,246 and one in eight believe this will prevent them from getting on the property ladder. Debt is such a barrier for some graduates that in hindsight one in six would not have taken out a student loan whilst at university.
Murdo McHardy, Head of Product Development and Marketing at Scottish Widows Bank comments: "Our report has yet again revealed that graduates are not finding it easy to get on the property ladder with house prices continuing to rise and first time buyers being unable to save for that deposit. Even for those graduates that are able to get on the property ladder, many are relying on buying with partners and are then not in the position to buy them out if problems arise. This leaves graduates in a real 'Catch 22' situation - do they wait until they can buy on their own or do they buy with a partner when they are not quite ready? With no exit route in place, graduates need to be fully aware of the size of the commitment involved in buying with someone else."
