First-time buyers delay plans due to cost of living

SEVENTY per cent of people hoping 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, according to new research from Nationwide.

The poll of more than 2,000 people who are looking to buy their first home within the next five years shows that saving up for the deposit is the biggest issue, with 28 per cent claiming it is the most difficult hurdle to overcome.

Nearly 90 per cent of people say that their ability to save for a deposit has been impacted by the rising cost of living. Nearly half of those impacted have reduced the amount they normally save towards their deposit, with more than a third using the money they would have saved to pay other bills.

Fourteen per cent say the main problem with buying a house or flat for the first time is the ability to borrow enough, while 12 per cent believe that keeping up with mortgage payments will be the main challenge.

Over half of people said that high house prices were the main barrier to buying their first home, and 43 per cent said their rent was too high to be able to save.

Paul Archer, Senior Mortgages Manager at Nationwide Building Society, said: “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.

“With high house prices and the rising cost of living, we need to tackle the first-time buyer challenge on multiple fronts.”

Would-be first-time buyers are cutting costs to try and get on the property ladder. They are doing this by reducing everyday spending, cutting back on going out, and selling some of their belongings.

The average amount of money saved by prospective first-time buyers towards their home is £14,700. This peaks at £21,071 in Greater London, and is at its lowest in Northern Ireland, at £7,065. To get there, people have been saving for around three to three and a half years on average.