Struggling first-time buyers looking abroad

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by Kay Murchie

Increasing house prices and rising interest rates means that first-time buyers in the UK have had a rough time in recent years, therefore, a new trend of purchasing a property abroad is emerging, according to Investors Provident.

60% of those who did make it onto the property ladder had to pay stamp duty according to Thrifty Scot and figures from the Council of Mortgage Lenders showed that in June this year, the average first-time buyer had to borrow 3.37 times their salary.

According to figures from Housepricecrash.co.uk, the amount of first-time buyers has dropped from 55% of the market 10 years ago to 29% currently.

There are plans to build more homes and provide help to ease the problem in the long-term but the situation remains serious at the moment. Many analysts believe that interest rates will reach 6% over the next few months.

As a result, many people are looking to invest overseas, according to Investors Provident. A spokesperson for the company commented that a lot of people who used to traditionally look at the UK market and never really thought about overseas investment are now starting to look further a field. However, this does not mean that younger people are choosing to move abroad – this is largely the preserve of the over 50s. It is the returns on rental income that the younger generation can get which appeals to them.

The company concluded that rental income from overseas can help pay rents in the UK - this might just provide that extra capital to enable them to finally get on the property ladder in the UK, if and when the housing situation in the UK does improve.