Research reveals the biggest obstacles to homeownership
Seven in 10 (70%) people looking to buy their first home in the next 12 to 24 months are delaying purchases as the rising cost-of-living impacts their ability to save towards a deposit, new research from Nationwide Building Society has revealed.
On average, prospective first-time buyers say they will delay buying a home for nearly two years, with almost one in five (19%) saying they are pressing pause on their homeownership aspirations for more than three years.
The survey also revealed that deposit is the biggest hurdle, with 28% claiming it is the most difficult part of hom ownership to overcome. By contrast, just 14% said it’s the ability to borrow enough, and 12% mentioned keeping up with mortgage payments to be the main challenge.
According to Nationwide, around nine in ten (88%) have had their ability to save for a deposit impacted due to the rising cost-of-living.
That has led to close to half of those impacted (48%) reducing the amount they save towards their deposit, with more than a third (38%) using the money already earmarked as a deposit to pay towards other bills.
“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,” Paul Archer, senior mortgage manager at Nationwide Building Society, said.
When respondents were asked whether 2022 is a good time to buy their first home, those starting out are very much split – 51% disagreed while 49% agreed.
Of the main problems noted by people about buying a home in the area they live in, nearly three in five (57%) said it was high house prices, while 43% said rents were too high to be able to save.
Nearly a quarter (24%) said their area had a competitive housing market, while the same amount (24%) said there was a lack of homes on the market.
The current pressure on finances is also making people consider moving to other areas, according to the poll, with around seven in 10 (69%) willing to relocate to another part of the UK in order to get more for their money, with 65% willing to do so in order to get a bigger property.
Nationwide’s research also found that people have been saving for around three to three and a half years on average to buy a home. More than four in five (86%) prospective first-time buyers have been saving for their deposit for at least three years, with 14% saving for six or more years.
Three-quarters (75%) saved their deposit themselves, while more than a quarter (26%) relied on their partner. Almost a quarter (23%) received the money from a parent or grandparent – either through the money being gifted or through them releasing equity from their properties.
“With high house prices and the rising cost-of-living, we need to tackle the first-time buyer challenge on multiple fronts. Which is why over the last couple of years we’ve ramped up our support for first-time buyers,” Archer said.
Nationwide has initiated efforts to support those looking to get on to the housing ladder during a period of high house prices and the rising cost-of-living. This includes a range of low deposit mortgages, the opportunity for first-time buyers to borrow up to 20% more through its Helping Hand mortgage, and £500 cashback.
“We also know that each person’s situation to buying a home is different, which is why we’re launching our new first-time buyer hub. We want people to be able to use the supporting guides and information to help them navigate their own specific journey to that first home,” Archer added.
The research was conducted by Censuswide on behalf of Nationwide between April 08 and April 13, with 2,051 prospective first-time buyers or people looking to buy in the next five years as respondents.
