Rising Living Costs Stop 70% FTBs From Buying New Homes
The latest research by Aldermore suggests more than 70% of prospective first-time property buyers (FTBs) delay their home purchases because of the costs of living crisis.
The vast majority of first-timers struggle to secure a mortgage because of the ongoing costs of living crisis. As a result, 72% of FTBs have to delay their plans of buying a new home.
Key Research Findings By Aldermore
Aldermore surveyed 2,000 ambitious first-time property buyers and revealed current settings in the market. A typical FTB in the UK plans to save £43,500 for a deposit, with a similar figure reaching £54,500 in the London property market. By comparison, new buyers in Yorkshire plan to save just £27,300 on average.
Many criticise potential buyers for not cutting costs when saving for a deposit, which might be justified. However, an average deposit of £43,500 equates to 72 average monthly rents, meaning that this is a huge number for anyone buying a home, especially first-time buyers.
More than half (51%) of buyers take advantage of savings accounts when saving for a deposit. However, 44% are relying on current accounts that don't allow them to save almost anything because of the current high-inflation settings. In addition, 8% of respondents take advantage of cryptocurrency despite its underlying risks.
How Living Costs Impact Buyers In 2022
The costs of living crisis is the most significant barrier for current FTBs dreaming about owning a new property, with 72% of respondents confirming that. Around 30% of respondents said the rising living costs delayed their homebuying dream for 20 months.
Some 64% had to cut their typical savings, delaying their homebuying journey even more. Meanwhile, 19% of FTBs started looking for more affordable housing.
Experts Confirm
Aldermore highlights the challenging market settings for first-timers trying to save for a deposit. However, the majority of homebuyers think that the challenges are worth it in order to step onto the property ladder.
It is critical for ambitious homebuyers to seek help and consider available supporting initiatives, like the Help-to-buy scheme (coming to an end), Shared Ownership, and the First Homes Scheme.
New buyers should seek support from lenders who can help them and guide them through the often complex homebuying journey.
