Affordability of monthly mortgage repayments is a growing barrier to homeownership
![Majority of Brits think home deposits are too high – BSA](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/us/077/0311_638545531589602530.png)
Over half, or 56%, of Brits believe the deposit required to buy a home is too high, according to the June Property Tracker report from the Building Societies Association (BSA).
For first-time buyers, the figure rises to 63%, which should be unsurprising, the BSA said, considering a typical first-time buyer now needs a deposit of around £60,000, a 160% increase from the average £23,000 required in 2005. Wages have grown by less than half this amount over the same period.
The BSA report highlights that the affordability of monthly mortgage repayments is a growing barrier to homeownership, with 68% citing this issue, an increase from 62% in March. Similarly, 65% find raising a deposit to be an obstacle, up from 60% in March.
Earlier this year, many anticipated a rate cut this summer, but this now seems unlikely as some measures of inflation remain higher than expected. This could mean that mortgage affordability does not improve as anticipated.
Mortgage arrear levels have remained low, and the majority of people (88%) are not concerned about keeping up with their mortgage payments. However, a small minority are not confident about making their mortgage payments over the next six months. In total, 10% expressed a lack of confidence, similar to 8% in March.
An increasing number of people believe house prices will rise over the next 12 months – 45% compared to 41% in March and 23% in June 2023. Rising house prices, especially when outpacing wage growth, are likely to increase the already significant burden of raising a deposit for first-time homebuyers.
“It’s unsurprising that housing market sentiment has declined this month, as mortgage affordability continues to be a significant barrier to buying and owning a home,” said Paul Broadhead (pictured), head of mortgage and housing policy at the Building Societies Association.
“While it is pleasing to see the main political parties recognising the struggles of homebuyers, particularly first-time buyers, in their manifestos, it will take more than short-term government schemes to fix our broken housing market.
“The new government must commit to working with lenders, regulators, the wider housing market industry, and the public to make homes more affordable, more available, and more appropriate to the needs of those living in them and the world we live in. We hope whichever party is leading government on July 5 will commit to new and radical solutions to support the UK housing market.”
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