Graduates are more likely to pass the first home-ownership test

Nearly seven out of ten (69%) prospective first-time buyers expecting to buy in the next 12 months are University educated, holding either a graduate degree (39%) or post-graduate degree (30%).

Despite the length of time spent studying – not to mention the associated costs of university-level education – those educated to degree level appear able to seriously contemplate getting a foot on the property ladder sooner. The average age of a graduate prospective first-time buyer is 30, compared with an average age of 32 for a school-leaver. The average age for a post-graduate intending to buy for the first time is 33, though this is naturally skewed by the length of time studying, particularly for doctorate-level qualifications.

Shipside comments:
“In today’s market, getting a degree under your belt is a common pre-requisite among the constrained numbers who make it onto the housing ladder. Studying for a degree also seems to increase the chances of buying sooner. Joining the world of work straight from school may start your earning career a few years earlier, but in the current housing market it seems the downside is that it may delay being able to satisfy your home-ownership aspirations.”

The average deposit for a graduate or post-graduate first-time buyer is around £35,000, compared to £25,000 for ‘non-grads’. University-educated first-time buyers also benefit from greater financial assistance from family members with their future house purchase. 30% of them state they will be the recipient of some form of family financial assistance in building their deposit, whereas only 24% of ‘non-grads’ are expecting a contribution. With lenders demanding higher deposits to get a mortgage, and lower loan-to-value advances attracting lower interest rates, this puts ‘grad first-time buyers’ in a better financial position.

Shipside observes:
“Whether it’s a parting gift or a parting shot to get them to finally leave the family nest, financial assistance from their parents means graduates can raise a more substantial deposit and buy their first home younger than ‘non-grads’. These are testing times for all first-time buyers, though in the current credit-strapped housing market, it seems that today’s grads will be making up the bulk of tomorrow’s first-time buyers.”