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

  • 04/05/2022
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First-time buyers put plans on hold as cost of living bites
Some 70 per cent 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 survey from Nationwide consisting of over 2,000 respondents suggests 19 per cent of respondents will put off buying a home for at least three years because of increasing costs. 

Some 88 per cent are worried that costs will impact their ability to raise a deposit with disparities between regions. In Scotland, 93 per cent of respondents say they are worried about the effect this will have on saving towards a deposit, while 98 per cent of people in Northern Ireland said the same. In Greater London, where respondents showed the least concern, this still accounted for 82 per cent of respondents.  

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

When asked if 2022 was a good time to buy their first home, 51 per cent of respondents said no and the remainder said yes. 


Financial considerations

Approximately 48 per cent of respondents 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 per cent have committed to reducing how much they socialise, 36 per cent will sell items and 12 per cent will cancel family plans. 

Additionally, 69 per cent 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 per cent of those planning to buy a home in their local area. A further 43 per cent said 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 per cent of respondents said they had been saving for more than three years and 14 per cent saved for at least six years. 

Three-quarters saved their deposit on their own while a quarter relied on their partner. Some 23 per cent received money from either a parent or grandparent, while 13 per cent 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.”

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