Study also reveals low awareness of support schemes among first-time buyers
New research from specialist lender Bluestone Mortgages has highlighted the main barriers to homeownership, with affordability concerns driven by the cost-of-living crisis topping the list.
According to the study, 37% of first-time buyers identified general affordability and the rising cost-of-living as their biggest challenge, followed by difficulties in raising a large enough deposit (34%) and insufficient income (33%).
While affordability remains a significant hurdle, the research also found that many prospective homeowners are unaware of schemes that could help them. Only 36% of first-time buyers were aware of shared ownership, and just 8% were familiar with the Deposit Unlock scheme.
Another study, conducted by savings and investing app Moneybox, has found that 41% of first-time buyers over the past two years had difficulty understanding their mortgage options, while 40% faced challenges in securing a mortgage that fit their financial situation.
According to the Bluestone Mortgages report, home movers looking to upgrade face similar challenges as first-time buyers. For 43% of these buyers, local house prices were cited as the biggest obstacle, followed by concerns about mortgage interest rates (37%) and general affordability (35%).
Despite the financial pressures, only 30% of home movers reported using a mortgage broker. A further 33% said they plan to use one in the future, while 15% indicated they would apply directly with lenders. The Moneybox research, meanwhile, indicated that of the buyers who faced challenges, 39% said they regretted not using a mortgage broker to guide them through the process.
“For many people, getting onto or climbing the property ladder is still a distant dream, but it’s not impossible with the right support,” said Ryan Davies (pictured), strategy director at Bluestone Mortgages.
“Now more than ever, the industry needs to focus on developing and raising awareness of innovative solutions such as Deposit Unlock to tackle the challenges associated with getting onto the property ladder.
“Brokers have a key role to play in this, not only through marketing their services and demonstrating where they can add value, but highlighting the range of products available to help customers with smaller deposits achieve their homeownership ambitions.”
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