Inflation, high living costs and difficulties finding an affordable property were the main barriers first-time buyers faced when trying to purchase their first home.
According to Aldermore’s First Time Buyer Index, fledgling buyers now expect to save an average of £51,923 to put towards the deposit on their home.
For more than three in five prospective first-time buyers, this is more than they initially expected. They are saving an average of £21,664 extra than they originally planned to.
On average, prospective first-time buyers plan to allocate up to 30% of their take-home pay for their monthly mortgage payment.
However, as mortgage rates have increased, 55% now expect to buy a cheaper home to keep within their planned budget.
Barriers to homeownership
A fifth of home buying hopefuls perceive inflation and high living costs as the biggest barriers to realising their dream, while a similar proportion (19%) simply found it hard to find an affordable property.
Jon Cooper, director of mortgages at Aldermore, said: “The economic environment has made homeownership a lot more difficult.
“Larger deposit requirements, higher interest rates and affordability challenges are squeezing the market. Prospective buyers have responded by purchasing cheaper homes to offset higher mortgage repayments and, reassuringly, many still view homeownership as a major life goal as well as a good investment.
“Looking ahead, we must strive to better support first time buyers, so that more of them can gain a foothold on the property ladder. Fundamentally, while it’s positive that there were steps taken in the Autumn Budget to get Britain building, more new and affordable homes need to be built to help ease increasing house prices for the next generation of buyers.”
