Nearly 50% of first-time buyers market express growing concerns about the feasibility of homeownership, citing the ongoing challenges of the cost-of-living crisis. Research conducted by the Nationwide Building Society unveils a significant shift in sentiment, with 20% of respondents now expecting to purchase their first home in their forties, a notable increase from the current average age of 33 among first-time buyers.
The survey, encompassing over 1,000 aspiring homeowners, sheds light on the pervasive impact of escalating living expenses on individuals’ homeownership plans. Over 84% of respondents acknowledge feeling the strain, with six in ten opting to postpone their homeownership ambitions by up to three years. This postponement reflects a strategic response to the prevailing economic climate as prospective buyers grapple with the financial hurdles associated with property acquisition.
Amidst this landscape, the future trajectory of the housing market remains uncertain, as the affordability gap continues to widen for many prospective buyers. The prolonged postponement of homeownership aspirations not only reflects individual financial constraints but also underscores broader systemic challenges in the housing market. As policymakers and stakeholders navigate these complexities, addressing the root causes of the affordability crisis becomes imperative to ensure equitable access to homeownership for all aspiring buyers.
Nationwide is advocating for increased government support to bolster homeownership, urging for an independent review of the first-time buyer market, reforming stamp duty, and facilitating more lending at high loan-to-income ratios. In collaboration with the Building Societies Association and four major UK building societies, Nationwide is spearheading the development of a Housing White Paper slated for release in spring. This initiative aims to address the underlying challenges driving the homeownership crisis.
When surveyed about the primary obstacle to securing their first home, nearly a third of respondents (31%) cited difficulties in saving for a deposit. However, affordability concerns emerged as another significant barrier, with 44% highlighting affordability issues as a key challenge. This underscores the multifaceted nature of the challenges facing prospective homebuyers, highlighting the need for comprehensive solutions to foster greater accessibility to homeownership.
- 20% of respondents identified the challenge of finding properties within their budget as a significant barrier.
- 14% expressed concerns about affording the monthly mortgage repayments.
- 10% highlighted the difficulty in borrowing a sufficient amount for the mortgage as a key obstacle.
Rachael Sinclair, Nationwide’s Director of Mortgages and Financial Wellbeing, emphasises the urgency of addressing the challenges facing first-time buyers. Nationwide has consistently advocated for government intervention, calling for an independent review of the first-time buyer market. Additionally, Sinclair highlights the upcoming launch of a Housing White Paper in collaboration with the Building Societies Association, aimed at proposing crucial policy reforms to alleviate the homeownership crisis and facilitate entry into the housing market.
Regarding deposit savings, a substantial portion of prospective homeowners face prolonged periods of saving. Over a quarter (26%) of aspiring homeowners have been diligently saving for their deposit for three to five years, while another 10% have been accumulating funds for six or more years.
However, a significant majority of respondents (52%) find themselves with reduced monthly savings for a deposit due to financial challenges. Additionally, 29% indicate that financial constraints have affected the level of supplementary support, such as parental assistance.
The survey reveals that the average deposit amount people can allocate stands at £9,533, considerably below the £22,400 required for a 10% deposit based on Nationwide’s House Price Index, which cites an average first-time buyer house price of £223,554. While more than half (52%) have access to up to £5,000 for a deposit, approximately a quarter (26%) can only muster up to £1,000, and 11% have no funds available for a deposit.
Amidst concerns over rising mortgage rates and escalating bills, 80% express apprehension about managing mortgage payments. This financial strain prompts many individuals to explore various options for purchasing their first home, including potential co-buyers and alternative locations. While the majority (57%) intend to buy with a partner or spouse, 12% are considering purchasing with a family member.
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