More than a third of prospective first-time buyers (35%) need an average annual salary increase of £21,646 to realise their property aspirations, new research from Aldermore shows.
With mortgage rates and house prices continuing to squeeze affordability, nearly two thirds (64%) are putting aside more than they initially expected. Prospective buyers now expect to save £48,168 for a deposit.
FTBs are taking proactive measures to achieve their dream and boost their financial position. 40% are looking for higher-paying jobs, 22% have negotiated a pay rise, and 21% switched or are considering switching careers.
20% have already moved jobs for bigger bonuses, while 17% delayed leaving a job to strengthen their mortgage application and 13% have gone into or considered a career they don’t like to buy a house.
And yet, even with bigger deposits, expectations around monthly costs remain mismatched with reality. Prospective first-time buyers say the maximum they’re willing to allocate to mortgage payments is 27% of their income but current homeowners know that’s far from typical. After tax, buyers with a mortgage spent an average of almost 31% of their salary on their mortgage. This rises to 41% for buyers aged 18–24, and 37% for those living near London.
This gap between expectations and reality is pushing homeownership further out of reach. Today’s aspiring buyers don’t expect to get the keys until age 37, six years later than recent first-time buyers, who purchased aged 31 on average.
Half of all first time buyers will spend five or more years saving (45%), while one in 20 will take more than a decade (5%).
Jon Cooper, director of mortgages at Aldermore, said: “The UK’s first-time buyers aren’t just tightening their belts, they’re rethinking their entire career paths to try and get on the ladder. From chasing pay rises to moving into different roles, prospective homebuyers are reshaping their working lives to secure a home of their own. Their ambition is as strong as ever, but the sacrifices they’re making are more significant."
