GE Money Home Lending: 30-Year Comparison Highlights First Time Buyer Transformation

A new study comparing lifestyles and attitudes today with those of
30 years ago by GE Money Home Lending (UK) & The Future Foundation
reveals the impact of a shift in social priorities in the UK, as
today's twentysomethings refuse to conform to traditional family life
and community, instead opting for independence, lifestyle and
experience ...

-- Social and economic change drives a 26% increase in average
age of First Time Buyer over past four decades - from 27 in
1977 to 34 in 2007

-- Half as many 25-year olds see homeownership and marriage as
important compared to 30 year ago, with socialising and
friends now top priority

-- Only half of first time buyers cite living with a partner as
necessary to live properly in 2007 - down from almost three
quarters in 1977 (71%)

-- In 1977 being on friendly terms with the neighbours was
essential for two thirds (64%) - in 2007 less than half see
this as important

-- Having satellite TV is 50% more important to First Time Buyers
as having children, as desire to start a family almost halves
to 19%

-- A staggering 1,436% house price inflation over 30 years leads
76% of consumers to claim first time buyer affordability is
worse than ever before

"The fact that taking the first step onto the property ladder now
occurs later in life is due in no small part to economic factors such
as house prices. However, our analysis also reveals that today's
potential younger buyers also have vastly different attitudes,
aspirations and lifestyles to their counterparts 30 years ago. This
refusal to conform to traditional family-oriented motivations and the
desire to gain independence and experience, undoubtedly delays the
purchase of a first home and contributes to the ongoing affordability
issues faced by these consumers."

Gerry Bell, Head of Mortgage Marketing, GE Money Home Lending UK

A new report published today by UK mortgage provider GE Money Home
Lending, reveals the extent to which the profile of the average first
time buyer has transformed over the past thirty years. The report,
entitled "Life on Mars", suggests that as well as the obvious economic
factors, changing lifestyle choices are playing a significant part in
delaying that crucial first step onto the property ladder, as well as
contributing to the affordability stretch.

House prices and affordability: There has been a staggering 1,436%
house price inflation since 1977, resulting in 76% of consumers
claiming today is the worst time ever in terms of affordability for
first time buyers. The average first time buyer now devotes almost a
quarter of income to annual mortgage payments.

Changing lifestyle priorities: In 1977 the top priority for a
25-year old was buying a home and getting married. 30 years on,
spending time with friends, leisure time and travel take over as the
top priorities. Marriage and homeownership in 1977 have both halved in
importance for the average 25 year old today, contributing to the
significantly increased age of first time buyers, marriage and
parenthood. These choices often make affordability more difficult in
later life - as the pursuit of life experiences and leisure increases
young people's personal debt levels, whilst at the same time house
prices continue to move out of reach for them.

Key lifestage events - importance and average age

-0-
*T
Event Important to 25yrs olds (%) Average age
------------------- --------------------------- ----------------------
1977 2007 % Change 1977 2007 % Change
------------------- --------------------------- ----------------------
Buying a home 30 17 -49% 27 34 +26%
------------------- --------------------------- ----------------------
Getting Married 20 10 -43% 24 31 +29%
------------------- --------------------------- ----------------------
Having children 10 7 -29% 27 30 +12%
------------------- --------------------------- ----------------------
Spending time with
friends/leisure 7 22 +217% - - -
------------------- --------------------------- ----------------------
Going travelling 3 9 +246% - - -
------------------- --------------------------- ----------------------
Changing jobs 1 6 +522% - - -
------------------- --------------------------- ----------------------
*T

Source: GE Money Home Lending/The Future Foundation

Motivations for buying your first home: The psychology of buying
the first home has shifted from one linked intrinsically with
marriage, towards a choice to be independent and gain a sense of
worth. In 1977 over half of first time buyers said their main
motivation for buying resulted from their recent marriage, compared
with just 14% in 2007. Conversely, more than half of first time buyers
in 2007 said wanting a home that was their own was their main
motivation for buying, compared with under a third in 1977.

The changing needs of first time buyers: There has been a
significant change in what first time buyers now consider to be
fundamentally important to "living properly" when buying their first
home, with a clear move away from marriage and community to individual
development, achievement and experiences.

In 1977 almost three quarters (71%) of first time buyers regarded
living with a partner as an essential priority - by 2007 this falls to
just over half. In addition, there has been a massive 44% decrease in
those who claim that having a child is key to living happily - from
33% in 1977 to 19% today (satellite TV is seen as more essential).
Perhaps the most revealing statistic is the fact that the number of
first time buyers that regard being on friendly terms with neighbours
as important has dwindled by almost a third.

First Time Buyers: living "properly" now and then

-0-
*T
% Change
Need/requirement 1977 2007 1977-2007
----------------------------------------------------------------------
Having leisure time & means to enjoy
it 37% 50% +36%
----------------------------------------------------------------------
Going out with friends 32% 45% +38%
----------------------------------------------------------------------
Having the internet access - 40% -
----------------------------------------------------------------------
Having digital/satellite TV - 27% -
----------------------------------------------------------------------
Marriage/partnership 71% 53% -25%
----------------------------------------------------------------------
Being friends with neighbours 64% 44% -31%
----------------------------------------------------------------------
Having a telephone landline 54% 50% -9%
----------------------------------------------------------------------
Having children 33% 19% -44%
----------------------------------------------------------------------
*T

Source: GE Money Home Lending/The Future Foundation

How the first home is bought: The picture of who people buy their
first house with has changed somewhat over the last 30 years. The
proportion buying with their husband / wife has seen a huge decrease
since 1977 from 80% to just a third today with some 28% of first time
buyers in 2007 buying on their own - almost double the proportion that
did in 1977. In addition a staggering 51% of all First Time Buyer now
receive some form of financial support from parents or grandparents.

Gerry Bell continued:

"This report has uncovered some key trends amongst contemporary
first time buyers which highlight the challenges we now face with
homeownership, compared with our parents 30-years ago. Affordability
is clearly a major issue and an issue which is here to stay, as house
prices continue to create the biggest challenge for future first time
buyers.

"However what has to be acknowledged is the fact that younger
people are increasingly choosing to reject the more traditional path
of family and community and choosing independent living and
experience. As this report highlights there are consequences to this -
such as affordability challenges and increasingly older first time
buyers and families.

"What the research undoubtedly illustrates, however, is that the
UK is a diverse and rapidly changing market which will continue to
pose challenges for buyers - particularly those seeking to buy their
first home."

Notes to editors:

-Regional data available on request

-Broadcast spokesperson available on request

About GE Money Home Lending:

-- With assets in excess of $26billion GE Money Home Lending is a
one of the UK's leading specialist lenders. Through its First
National and igroup brands it offers a range of specialist
mortgages and flexible unsecured loans for the home
improvement and holiday ownership markets.

-- GE Money Home Lending's products are sold through a national
network of carefully selected and accredited intermediaries,
including packagers, mortgage brokers, credit brokers and
independent financial advisers.

-- Branded lending is a major part of GE Money Home Lending's
distribution strategy and it currently has over 17 key
partnerships, which include TMT, PINK, and Optoma.

The Future Foundation

The Future Foundation is a leading international consumer
think-tank and strategic consultancy. Specialising in understanding
socio-economic change and consumer behaviour, the Future Foundation
provides intelligent research, analysis and commentary. Our research
and analysis is used in development of new products and services, to
inspire marketing and communications programmes, and to instil
awareness of the wider operating environment throughout client
organisations.

Our current clients range across most sectors and in many
countries, they include over 140 organisations including financial
services, manufacturing, automotive through to advertising agencies
and government departments.