First time buyer speaks out

Mark Wood wants stamp duty reform

Mark Wood is typical of many young Londoners who are desperate to climb onto the first rungs of the property ladder.

The 29 year old technical manager from Southampton currently rents a large house in a quiet street with two friends.

But after spending several years paying off his student loans, and living a carefree lifestyle, he's decided that the time has come to take the plunge.

"I earn about £45,000 a year, and I've also got £5,000 of savings" says Mark.

But even though he takes home a good salary, Mark is still finding it financially difficult to get his hands on his own bricks and mortar.

The areas he can afford tend to be down at heel. And there are other priorities competing for a slice of his wage packet.

Part of me really wants a place of my own, and London prices never seem to dip. But if there is a crash I don't want to buy at the peak Mark Wood

"I haven't got a pension. If I want to save for a mortgage I can't save for a pension as well. So my property will become my pension."

Stamp duty woe

A major bugbear for potential home owners is stamp duty and Mark has to consider the amount he can afford to pay.

HIGHER RATE TAXPAYER SPEAKS OUT Dr Neville Prior is worried about the effect on incentives Click here to read more case studies

Currently, any properties priced between £60,000 and £250,000 are taxed at 1% on the total price.

That's a big slice of money to hand over to the Treasury.

And because of soaring prices in the capital, there are few if any properties that don't attract the tax.

Mark supports any moves the Chancellor might make in raising the level at which stamp duty is paid.

"For me to buy my first house and immediately incur stamp duty, does not encourage me to want to get on the property ladder.

"It's an unrealistic marker that was set in 1993 and prices have gone up by over 100% in the last few years, whereas the marker hasn't. It should be brought into line with today's house prices."

Shelling out

While established home owners have watched the value of their homes rise in the UK's property boom, first time buyers are shelling out more and more money for the most basic flats.

So like many others, Mark has to decide whether to buy while he can afford to, or sit tight, and hope prices will drop.

Mark's budget hopes for first time buyers Stamp duty reform: Raising the threshold above which duty kicks in. This would help ease the initial cost burden for first time buyers. Fixed rate mortgages: Chancellor should help make them cheaper so that people can know in advance their housing cots, which could help when planning for a pension.

"Part of me really wants a place of my own, and London prices never seem to dip. But if there is a crash I don't want to buy at the peak.

"So I can't see myself getting a place until later this year."

And when the time comes, a fixed rate mortgage, to beat any fluctuating interest rates, will be Mark's choice.

He thinks that Gordon Brown should consider changing all mortgage products to a fixed rate, so that buyers always know exactly what their monthly payments will be.

A Treasury-inspired report into what needs to happen to encourage the UK long-term fixed mortgage market, by professor David Miles of Imperial College, is due out on Friday.

Next week Mark, and thousands of other potential buyers, will be watching to see exactly what surprises the Chancellor will pull from his red box.

Are you worried about spiralling house prices? Do you think Gordon Brown should take action to help first-time buyers?

Send us your views on the form at the bottom of the page.

---

My fiancée earns less than half of the amount of Mark's earning, but manages to save double amount of what Mark's saved. And, he's 4 years younger than Mark. He did a university degree and has to pay off his student loan as well. Mark needs to look at the way he manages his expenditure. Rent a cheaper house for now if he wants to save up for the deposit, do not go on luxury holidays. I'm sure he could get a house in no time.
Olivia, Southampton, England

I don't think Mark's lifestyle is the issue here, regardless of what he's earning buying a property in London will take a huge slice of his take home pay. If he was to buy a small 1 bed flat in a reasonable area it's going to cost him well in excess of £1,000 per month in mortgage repayments. I believe the only answer would be to stick strictly to the traditional 3x salary ratio for mortgages, this way house prices would stay pretty much in line with wages creating a much more stable housing market for all.
Tim, London

A salary of £45,000 a year and can't afford a house?! My partner and I earn a combined salary around £35,000 last year bought a property in Horsham, West Sussex. We were pushed out of the housing market in London so moved away. Simple as that. If you can't afford London, commute! We've found we've got a much better way of life now. We are minutes from the country and 30 minutes from the beach. Much better than the congestion and pollution of London.
Beth, Horsham, UK

Saving for a first property is tremendously difficult. My partner and I both work as lecturers, and cannot afford to buy. The more we save, the more prices rise. We have seen the price of a one bedroom flat in the Portsmouth area rise from £40,000 to over £100,000 in many cases, in the last 3 years. It's unrealistic, and can be very frustrating when people who have already managed to buy property tell us that it was just as difficult when they first bought a couple of years ago - clearly this is untrue.
Fay, Portsmouth

The alternative is that we move to a more French and German style economy Nick Denny, Manchester, UK

The trouble is that house prices have increased dramatically compared to average wages in the last 7 years. If you look at post-war data on wages and house prices (it's amazing what you can find on the internet) then it would appear that house prices are due for a rapid fall very soon (or wages a rapid increase). The alternative is that we move to a more French and German style economy, where fewer people own houses and more rent. Please, Mr Brown, don't let us go down that path!
Nick Denny, Manchester, UK

My partner is currently looking for jobs but we have decided to not to look at London - even though he could get a better job there - because we can't afford to live there in a few years time when we have kids and half the amount of money. This country needs to vote with its feet and say no to the stupid cost of living in the capital. Phone up potential employees and ask if you can work from home. If enough people do this they might have the sense to relocate and then their employees would have a better quality of life!
Jo, Leeds

I'm doing a similar job to Mark for less salary. I've got a simple suggestion for him - commute! Find a cheaper house outside of London and commute in.
Darren Wadland, Chelmsford, UK

The problem is simply one of supply and demand - there are more people needing homes in London than there are homes available. The only help the government could provide would be to encourage businesses to move out of London and the south-east to ease the pressure. The alternative is to concrete over Kent which is what appears to be their preferred solution.
Chris, UK

There is a growing divide between those who can afford a house and those who cannot and must therefore rent. If this divide continues I can see a return to a system of landowners and tenants. The same system we had hundreds of years ago. That's progress for you.
Roger Angus, Hull, UK

The story regarding Mark and his struggle to get on to the housing market shocked me deeply. This is a man with a salary of £45k a year who can not buy a home, remember please that the average wage in this country is around the £18k mark. In 40 years when today's first time buyers retire they will have no pensions, and will have struggled financially all their lives - this is no way for a "supposedly well off western country" to live.
Colin, Basingstoke, UK

Sorry Mark, but if you cannot budget for a mortgage on 45k a year, then you need more help than just the Chancellor. Look at your lifestyle and take a radical overhaul. Also remember your first house is unlikely be your dream house - so go for what you can afford, not with what you want to impress with. I manage perfectly to pay my mortgage on a fantastic house on one third of your salary. All the time you wait for what ifs and maybes from the government and economy in general, opportunities will pass you by and you will still be renting in 10 years time! I do totally agree though with you about the mortgage situation - loans should be at a fixed rate over the complete term of the mortgage - budgeting would be much easier then for all of us.
Lee, Hayling, England

I despair that either of my children will ever be able to afford to rent and save for their own homes.
Sue, Sussex

My partner and I hope to buy a house in the near future but will be reduced to a one-bedroom flat in a not-so-great location. Why? Because, in "support" of Tony Blair's "Education Education Education" mantra I am pursuing my DPhil and my partner has just finished his, thus we have very little money. This is not really an incentive to continue in education is it?
Cat, Oxford, UK

I saved up to get on the property ladder - people have to learn they can't have it all. If the guy is earning £45K, he must take home over £2.5 K a month - I'm sure he could have saved some of that.
Stewart, UK

Plenty of people manage to buy a property and pay into a pension without earning nearly as much as Mark. They, like myself, do this by buying a house in a "down at heel" area and doing without some of life's "priorities" in order to make that first step onto the property ladder.
Jessica, London, (Hackney because I couldn't afford Islington)

Send us your views on the form below.