Would-be first-time buyers forced to rent

Eight in 10 potential first-time buyers have to continue renting — as restricted access to mortgage credit prevents them from getting onto the property ladder, a new report claims.

The research conducted by Ignite Research on behalf of mortgage insurance provider, Genworth Financial, also found that more than 70% of first-time buyers were having to rely on their parents for financial help when purchasing a new home. Commenting on the results of the survey, economist, Jim Power said they supported the findings of research that he carried out earlier in the year on the role of universal mortgage insurance in Ireland, which found it had the potential to open up access to mortgage finance to first-time buyers.

“This research confirms that people in the first-time buyer segment of the market cannot access funding for new homes and are stuck either in the rental trap or continuing to place an

excessive reliance on their parents,” Mr Power said.

Mortgage insurance — which allows banks and building societies to protect themselves against potential losses suffered as a result of borrower default and which is common in other countries — would encourage sustainable lending practices, according to Genworth Mortgage Insurance Europe chief executive, Angel Mas.

“A system of privately- funded universal mortgage insurance will allow the Government to tackle the lack of access to mortgage finance for first-time buyers with good credit histories and the ultimate ambition to own their own home. And this can be done as part of a programme to prevent the reckless lending practices of the past from re-emerging,” said Mr Mas. The survey found that four-out-of five potential first-time buyers believed it was difficult to access mortgage funding while two-thirds believe the Government should do more to help them buy their first home.