You are here: Home - Mortgages - First Time Buyer - News -

First-time buyers put plans on hold as cost of living bites

Written by: Shekina Tuahene
Some 70% of prospective homeowners have delayed purchasing a property for up to two years due to the rising cost of living, with an overwhelming number struggling to save for a deposit.

A fifth of first-time buyers will put off buying a home for at least three years because of increasing costs.

Nine in 10 (88%) are worried that costs will impact their ability to raise a deposit with disparities between regions, according to a survey from Nationwide Building Society.

In Scotland, 93% of respondents said they are worried about the effect this will have on saving towards a deposit, while 98% of people in Northern Ireland said the same. In Greater London, where respondents showed the least concern, this still accounted for 82% of the 2,000 polled. 

Raising a deposit is the greatest concern for future homeowners, with 28% saying this was their biggest hurdle. Around 14% said the ability to borrow enough money was a barrier while 12% said keeping up with mortgage payments was the main challenge.

When asked if 2022 was a good time to buy their first home, 51% said no. 

Financial considerations

Approximately 48% said they have had to reduce the amount they save while nearly two-fifths have had to reallocate money which was originally intended for a deposit.

For those considering which costs to cut or how to raise additional cash, 43% have committed to reducing how much they socialise, 36% will sell items and 12% will cancel starting a family or adding to their family.

Additionally, 69% of respondents are now looking to relocate to another part of the UK to get more for their money while nearly two-thirds will have to buy with someone else.

High property prices were cited as the main issue for 57% of those planning to buy a home in their local area. A further 43% aid rents were too high to be able to save up. Nearly a quarter said their local housing market was too competitive, while the same proportion said there were not enough available homes.

Deposit raising

The average amount saved by prospective first-time buyers towards their home is £14,700 over the typical length of time of three and a half years.

Some 86% of respondents said they had been saving for more than three years and 14% saved for at least six years.

Three-quarters saved their deposit on their own while a quarter relied on their partner. Some 23% received money from either a parent or grandparent, while 13% gained their money as inheritance.

The research comes as the mutual announced the launch of an informational hub for first-time buyers. It also offers £500 cashback for first-time buyers who complete a mortgage with them.

Paul Archer, senior mortgage manager at Nationwide Building Society, said: “Building a deposit remains the single biggest barrier to homeownership today, with many people starting out facing a long uphill battle to save. The rising cost of living has made this even harder.

“With high house prices and the rising cost of living, we need to tackle the first-time buyer challenge on multiple fronts.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week