First time buyers put dreams of home ownership on hold over cost-of-living worries
Buying your first home is something the majority of us aspire to. No more so than my husband and I. After 17 very long years of renting, we finally bought our first home in 2021. In the height of the covid pandemic, when house prices rocketed, the stars aligned and everything just fell into place for us.
We were very lucky. To be honest, we’d almost lost all hope of every buying our own home. What’s more, as a parent, I worry about how my own children will ever be able to afford their own home. Buying a home nowadays seems harder than ever. With large deposits required and the demand for homes seeing an all time high, it’s pretty competitive.
With that in mind, it comes as no surprise to me that research commissioned by HSBC shows that one in four first-time buyers (25%) have either put their home-ownership plans on hold or stopped their search entirely.
Cost of Living Worries
Younger age groups say their biggest challenge is saving for a deposit (38%), with nearly one in five (19%) 25-34 year olds saying they live with their parents, family or friends. The data also shows most people need more help in understanding common mortgage terms including “APR”, and “Base Rate” – especially first-time buyers.
In addition there are different types of mortgages to consider too. From fixed-rate to tracker mortgages, as well as standard variable rate (SVR) mortgages.
It’s not just those looking to buy their first home who are changing their plans. One in four (25%) of existing home owners say the cost of living crisis has made them rethink their future – including more than one in ten (13%) who say they are no longer looking to move house.
Choosing the right mortgage
As mentioned above there are a few different types of mortgages available. It’s always best to speak to a professional such as a mortgage advisor for any kind of financial decision.
The research also found that when looking for a mortgage provider, people say they’re most likely to look for information on money saving websites (34%), mortgage provider websites (34%), get recommendations from friends and family (33%), use a broker (32%) or a comparison website (31%).
My husband and I asked for recommendations on social media for a mortgage broker. Our mortgage broker was really knowledgeable which made the whole process so easy. I’d definitely suggest finding a good mortgage broker as a starting point. Ours worked on a commission basis so we didn’t have to pay anything.
Of course, when looking for a mortgage you also need to consider the deposit required. The size of the deposit needed to buy a home is the most common reason people say they haven’t applied for a mortgage (18%), but that number is far higher among younger age groups – reaching 38% for 25-34- year-olds.
Despite all these different ways of looking for information, most Brits say they don’t understand many of the most-commonly used terms associated with mortgages – even more so if they’re a first-time buyer.
