Scottish Widows Bank recently unveiled the results of its annual Graduate Buyer First Time Buyer Survey with the assertion, “The class of 2005 report more optimism, but lenders and government must try harder.”The only way the government has helped is by doubling the lower threshold for Stamp Duty to 120,000 in the last Budget. Of those surveyed, 53% said this would make it easier to get on the property ladder. But since the average house price is over 120,000 in most of the country, these graduates must either be na or living in considerably cheaper areas than most of us. The biggest reason for increased optimism appears to be that graduates are becoming more willing to buy with family or friends, or use a shared equity scheme funded by the government or a lender. The survey found 62% of graduates see these as the best options for buying a house. So, rather than turn graduates away brokers should examine what options there are for them to buy a share of a property. Don’t forget, graduates should be nurtured as clients as they have high earning potential and a network of friends in a similar situation. Britannia was one of the first lenders to offer an option for graduates when it launched its share-to-buy scheme in the summer of 2004. This allows up to four people to borrow 3 x their incomes and gives the security of a free legal agreement setting out each person’s share should one move out. With more graduates leaving education with north of 10,000 in debts, this scheme could be better than wasting money paying rent on flats reminiscent of their student digs. But if one of your clients does want to buy with friends, they should be advised that it is a longer term commitment than renting and so is not ideal for everyone. Many graduates want to keep their career options open so they might have to move around the country or abroad at short notice. They must think through what they will do with their share of the property. And graduates’ personal circumstances aren’t always stable. One of the buyers may decide they’ve had enough of living with lots of people and want to move in with their partner. One might decide they’re not ready to settle into a career and launch off round the world for a couple of years. Shared equity is not the answer for all graduates but at least more are considering it rather than being pessimistic about ever owning – or expecting their parents to stump up for their dream home before their 21st birthday.
- Top trends
The FSA’s shift toward a principles-based approach to regulation makes sense of the big ideas that underpin the system and is therefore not something to be feared, says Bill Warren
To coincide with the Mortgage Business Expo, the direct conveyancing firm Goldsmith Williams has announced the launch of a sister company to work exclusively in the international market. The company, which will be branded Goldsmith Williams Overseas, will focus on all aspects of the international market with services designed to benefit introducers and their clients. […]
IFA Promotion is ceasing to run its corporate schemes with Yellow Pages and Thomsons local directories from December 2005, and will continue to shift its marketing focus online. Online requests for details of local IFAs have soared to outnumber traditional referral sources four-fold.IFAP members can still advertise in these directories in their own right but […]
The Bank of Ireland has revealed in its interim results for the half year up to September 30 a 28% increase in profit before tax.Basic earnings per share were up 30% and underlying earnings per share were up 10%. Brian Goggin, group chief executive for the Bank of Ireland, says: “This has been an excellent […]
Employees at Johnson Fleming, in Bromsgrove, Worcestershire, are looking forward to trying out some dramatic new hairstyles on Wig Wednesday. A host of colourful wigs will brighten up the office on 20 May as staff support children and young people with cancer.
News and expert analysis straight to your inboxSign up