This is according to Aldermore’s latest First Time Buyer Index which reveals the impact of the ongoing volatility in the property market on prospective buyers’ plans
Half of all prospective FTBs (55%) are currently seeking to raise a larger deposit than initially intended due to surging homebuying costs.
This is according to Aldermore’s latest First Time Buyer Index, a survey of 2,000 prospective FTBs, which reveals the impact of the ongoing volatility in the property market on prospective buyers’ plans.
On average, prospective buyers in the UK are planning to raise £47,067 for a deposit. Despite this, nearly three out of four potential buyers (72%) recognise the long-term value of home ownership and believe owning a home is a great investment for the future.
Apart from raising a larger deposit, almost half (49%) are planning to purchase a house of lower value than they initially thought, as higher interest rates have increased average monthly repayments, making home ownership less affordable. On average, prospective buyers would at most consider spending 30% of their monthly income after tax on their mortgage.
Nevertheless, in light of increasing home purchasing costs, half of prospective buyers (50%) are opting to put their homebuying plans on hold in the hope property prices decline further.
Regionally, the most expensive cities for FTBs to raise a deposit are London and Oxford, with buyers having to put forward £145,272 and £132,101 respectively. Meanwhile the cheapest city to raise a deposit is Sunderland (£21,117), marking a stark different from the Capital, where buyers are putting down six times more for their deposit.
For the same price as an average deposit in London, buyers in Sunderland could buy a property outright (average first time buyer selling price: £125,586) decorate and furnish it (national average: £14,410) and have £5,276 left over.
Aldermore head of mortgages Jon Cooper says: The property market has been a difficult environment to navigate after the considerable volatility we saw in late 2022. Homeownership is increasingly expensive, and FTBs are having to raise larger deposits and lower their budgets accordingly. While this may be disheartening, FTBs can still find their way onto the property ladder.
