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First-time buyers delay purchases on house price fall speculation

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Written by: Shekina Tuahene
11/11/2022
People planning to buy their first home in the next five years have pushed back their purchase dreams due to the effects of the cost-of-living crisis, while others are banking on a fall in house prices.

Research from Leeds Building Society found that 21% had delayed plans because of the rising cost of living.

The study, which was conducted in late October following the mini Budget’s market disruption, found that 19% put plans off because of higher rates.  

A fifth were holding out because of the possibility of falling house prices. 

The study polled 4,006 UK adults of which 2,454 were looking to buy within the next five years.

Most first-time buyers struggle to meet repayments 

More than three-quarters (81%) of aspiring first-time buyers said the cost-of-living crisis had made it harder for them to save a deposit. A tenth said they had stopped putting money aside for a deposit altogether while 36% have had to reduce the amount of money they save. 

The deposit is just one part of the struggle, however, as 68% of respondents said even if they were able to raise enough money for a home, they would struggle to meet the higher mortgage repayments. 

Some 69% were worried they would not qualify for a mortgage due to affordability while nearly three quarters were concerned about the availability of mortgage deals. 

A fifth said they had a mortgage offer withdrawn and were unable to get another. 

Overall, 49% worry they will now never be able to buy a property. 

‘Homeownership dream in crisis’

Richard Fearon, CEO, Leeds Building Society, said: “The findings from our research are stark but clear: the home ownership dream in the UK is in crisis. Houses have never been less affordable, and the cost-of-living crisis and the recent increases in interest rates are a further blow to those hoping to buy. 

“However, delivering meaningful change to the housing market requires a number of more structural issues, including building more homes. That’s why we’ve published our ‘Housing Roadmap’ of seven changes that need to happen to create a housing market that functions for everyone.” 

The mutual’s accompanying report Tackling the UK’s Homeownership Crisis proposed building more homes, investing in construction skills, developing sustainable homes and increasing routes into homeownership as ways to improve the housing market. 

It also suggested greater support for those saving for a deposit as well as existing homeowners, and plans to repurpose empty homes. 

Related: See YourMoney.com’s End of Help to Buy: 10 alternatives for first-time buyers to see a list of other schemes and initiatives to get on the property ladder.

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