The findings form part of new research released by digital bank, first direct, as part of its "Leap for the Ladder campaign", which aims to assist first-time buyers in this tough economic climate.
According to the data, 77% of prospective home buyers are concerned about their ability to get on the property ladder, and with inflation at a 40-year high of 10.1%, purse strings are set to tighten even more. 86% of prospective buyers identified the cost-of-living crisis as a notable obstacle to getting on the ladder, with not being able to save as much for a deposit cited (59%) as a major reason for any delays to their plans.
The survey also found that the average first-time buyer will take 7.5 years to save enough money for a mortgage deposit, highlighting the critical need for accessible FTB-led mortgage products, as existing homeowners surveyed took on average only five years to secure their first home.
When it comes to funding this costly purchase, 28% of people who are waiting to get on the ladder believe the only way they’ll be able to secure a home is through an inheritance – which they are yet to receive.
71% of first-time buyers, however, intend to use their savings, and 35% are planning to use government programmes such as the help to buy/shared ownership scheme.
Pooling assets with a partner, close relative, or friend can be an alternative way to secure the cash needed for a mortgage; However, 56% of those who currently own a property did so without the assistance of a partner or sibling. The research showed that first-time buyers, on the other hand, are sceptical about their ability to buy a house on their own, with only 35% citing this as a financial possibility, implying that a significant majority are unable to shoulder the financial burden alone.
Chris Pitt, CEO, at first direct, comments: “Getting on the property ladder is a distant dream for many today. The rise in house prices relative to incomes is well documented, as is the difficulty in saving for a deposit while at the same time paying rent. What this study shows is the time it takes to save and realise the dream of home ownership – it is a long time and getting longer. The state of the economy will only make this situation worse.”
