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Cost of living pours cold water over first-time buyer plans – Nationwide

  • 16/04/2024
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Cost of living pours cold water over first-time buyer plans – Nationwide
One in five would-be homeowners do not think they will be able to get onto the property ladder until they are in their forties, a significant increase on the current age of the average first-time buyer.

The poll of 1,000 aspiring first-time buyers conducted by Nationwide found that 84% of those surveyed agreed the cost of living had affected their ability to buy their first home. Just less than half have delayed their plans due to affordability concerns, while 60% were postponing their homeownership plans by up to three years.

The average age of a first-time buyer is currently 33 years old, yet some 20% of those surveyed said they did not believe they would be a homeowner until they were at least in their forties.

The building society says it is continuing to call for the government to provide greater support to boost homeownership through an independent review into the first-time buyer market, stamp duty reform and enabling more lending at high loan-to-income (LTI) levels.


Barriers to homeownership

Saving for a deposit and passing lenders’ affordability assessments were named as two of the biggest barriers to buying a first home. More than a quarter of prospective homeowners have been saving for their deposit for 3-5 years, with a further 10% saving for six or more years.

But saving is getting harder.

Some 52% of those trying to save for a deposit now have less money to put aside each month due to cost-of-living challenges.

According to the poll, the average amount saved for a deposit was £9,533, which falls far short of the £22,400 needed for a 10% deposit based on the £223,554 average first-time buyer house price recorded by the society’s house price index. While more than half had up to £5,000 available for a deposit, around one in four only had up to £1,000, while 11% said they had no money available to put towards a deposit.


Affordability constraints

Meanwhile, some 80% were concerned about mortgage payments at a time when mortgage rates have increased alongside a rise in other household bills.

The struggle to afford the monthly payments means many people are forced to look at a range of buying options.

Some 57% plan to buy with their partner or spouse, while 12% will look to buy with a family member.

According to the poll, 55% said they’d be willing to buy in another part of the country where house prices are cheaper, or where they could buy a bigger property. Of those surveyed, 70% of respondents are prepared to move up to 50 miles away just to buy their first home.

Rachael Sinclair, Nationwide’s director of mortgages and financial wellbeing, said: “Getting that first home is as challenging as it ever has been. We need to solve the first-time buyer conundrum, which is why Nationwide has continually called for government to set up an independent review of the first-time buyer market.

“It’s why we’ll also be jointly launching a housing white paper with the Building Societies Association next week, which will outline the essential policy changes that are needed to tackle the homeownership crisis and support people into their first home.”

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