Tuesday, June 3, 2003

A story published today in the Estate Agency News reports that single people have become the driving force behind the housing market in London where, in 2002, they made up over 50 per cent of buyers.

And figures published by market intelligence company Key Note suggest that the trend will be repeated throughout the UK as the number of single people continues to rise.

Single people are now the biggest borrowers when it comes to buying a home and were loaned £42.7 billion in new borrowing last year.

They make up 27 per cent of UK households, up from 18 per cent 30 years ago, but account for 40 per cent of mortgage borrowing.

The report forecasts that single people applying for mortgages will make up nearly half of the market by 2007 and also found that more than four out of five single borrowers buy on their own through choice and two in five say they value their independence.

By 2010, single-person households will predominate, accounting for almost 40 per cent of all households in the UK, according to Key Note.

However, their report points out, the rise in property prices over the last few years has made it increasingly difficult for single people to get a foothold on the housing ladder, particularly in the capital.

Key Note say that the growth in numbers of young singles is chiefly attributable to the trends towards delayed marriage and changing lifestyle and social values relating to marriage, which has seen a steady decline in popularity over the last 30 years.

In the year 2000, 34 per cent of adult men and 26 per cent of adult women in the UK were single.
In addition, the report shows that the proportion of men who are married fell from 71 per cent of the total in 1971 to 54 per cent in 2000, while the proportion of women who are married fell from 65 per cent to 52 per cent.

Over the same period, divorce increased more than eight-fold for both men and women.

Despite the apparent boom in sales of homes to single people, significant obstacles are emerging for younger homebuyers.

Figures from Key Note suggest that the average age of first-time buyers could rise to 36 years of age over the next decade, and to 40 in London as rising house prices make it increasingly difficult for younger purchasers to save for deposits.

In addition, the average deposit could rise to £32,000 by 2011. In London, that figure could rise to £34,000.

Single people are finding home purchase more problematic as prices soar and they are tending to delay purchase until well into their 30s, say Key Note.

In London, the under-25s now make up only five per cent of buyers. In 1985, almost a third were in this age group.

Now, more than half of first-time buyers are aged between 25 and 34 years old, and only 14 per cent are under 25.

Affluence, or having rich parents, meanwhile appears to be becoming a more important factor in the purchase of homes by single people. The Woolwich Building Society, for example, reported in 2002 that nearly a third of first-time buyers relied on financial help from their parents.

Faced with a property price rise of 23 per cent in 2002, young single people and first timers are linking up to make their latest buys.

A survey by the Council of Mortgage Lenders shows that the number of mortgages taken out by friends or relatives doubled between 1997 and 2001 — and last year’s figure is expected to be higher.