Research from Leeds Building Society found that 21 per cent 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 per cent 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 per cent) 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 per cent have had to reduce the amount of money they save.
The deposit is just one part of the struggle, however, as 68 per cent 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 per cent were worried that 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A fifth said they had a mortgage offer withdrawn and were unable to get another.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 per cent worry they will now never be able to buy a property.
A third have never heard of shared ownership
Leeds Building Society examined shared ownership as a way of getting on to the property ladder and respondents’ awareness of the scheme.
Once they were told what it was, 60 per cent of respondents felt it would help them get onto the property ladder in the future while 22 per cent of current homeowners said it would have got them into their homes sooner.
Some 36 per cent had not heard of shared ownership before.
Of those who had used the scheme, 77 per cent said it meant they needed a smaller deposit and 72 per cent said they were able to buy sooner.
Making the housing market fit for all
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.
“In the short term, a stronger case needs to be made for shared ownership to help more people get the keys to their first home. The key advantage of shared ownership is that buyers need a smaller deposit, potentially allowing them to buy sooner than they might otherwise. There is a clear lack of awareness about the benefits of shared ownership and lenders, brokers and estate agents all have a role to play in changing that.”
Fearon added: “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 so 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.
