Over half of first-time buyers need larger deposit due to pandemic

Over half of first-time buyers need larger deposit due to pandemic

 

According to Aldermore’s first-time buyer index, which surveyed 2,015 prospective and 500 actual first-time buyers, the average deposit size is now £62,572, or around 19 per cent of a property’s value.

The report added that it would take first-time buyers who bought since the start of the pandemic an average of nearly five years to save up enough of a deposit.

It added that the process of buying had become increasingly complex over the past 18 months, with two in five survey respondents saying it took two or more offers to secure a home.

The report also noted that just under half, 49 per cent, were in the process of purchasing a property for it to fall through, which cost buyers an average £2,402 and one in nine spent £4,000 or more.

First-time buyer purchases were also delayed by around three months, with one in six saying it was delayed by over five months.

 

The cost factor

 

Costs from solicitor fees, mortgage fees, conveyancing fees and valuation, moving fees, rent paid to prior homes and estate agent fees on average set first-time buyers back by £4,486.

Extra barriers and costs meant that nearly half, 48 per cent, of those surveyed did not get home they wanted or compromise to get on the housing ladder.

Jon Cooper, head of mortgage distribution at Aldermore, said: “Becoming a homeowner is a wonderful step forward in a person’s life but our research shows the persistent effects of the pandemic are causing high levels of financial challenges in the journey.

“While costs and complicated processes may feel daunting, we’ve found first time buyers are glad they did it, with 78 per cent saying the stress was worth it to find a home. I would advise would-be buyers to plan carefully to ensure they are prepared for the range of costs involved and to seek a broker who can be a great help in cutting through the jargon and guiding you through the process.”