Cost of living crisis sees over 70% of FTBs delay buying their home

Newly released research from Aldermore, which surveyed 2,000 prospective first-time buyers, highlights that on average, prospective first-time buyers plan to save £43,500 for a deposit.

First-time buyers in London and the South East expect to save the most at £52,777 and £54,570 respectively, with Yorkshire buyers expected to save nearly half of that (£27,379) on average.

When it comes to first-time buyers struggling to save for a deposit, some have criticised would-be buyers for failing to make sacrifices or cut costs to reach their deposit goals.

However, using the nationwide deposit average of £43,500, this would equate to 7,250 portions of smashed avocado on toast, 3,702 Uber rides, 72 months’ rent, 1,087 months’ gym membership, or 1,366 Ryanair flights.

While 51% of prospective first-time buyers are utilising savings accounts to save for a deposit that typically offer higher rates of interest, a concerning amount are holding their savings in low-interest savings vehicles, with 44% using current accounts, despite the current high-inflation environment eroding the real-term value of these savings. Additionally, 8% are relying on cryptocurrency to generate deposit funds, despite its considerable volatility.

Cost-of-living crisis impacts homebuying dreams

Rising living costs have become a greater barrier to purchasing a home, with 72% of prospective first-time buyers impacted by the ongoing crisis. This has delayed 32% from buying a property and realising their homebuying dreams, with delays of 20 months on average.

Nearly two-thirds of all first-time buyer hopefuls have had to scale back their regular savings (64%), likely increasing the time it takes to get on the property ladder, while 19% have had to opt for looking for a cheaper home.

Jon Cooper, head of mortgage distribution at Aldermore said, “While saving in this current economic climate may feel like a long and arduous journey, we’ve found that the majority of determined first-time buyers think the difficulties are ultimately worth it in order to get on the property ladder.

“It’s important that prospective buyers are aware of the support available to them. Would-be buyers should consider seeking advice from a broker who can lend a helping hand and guide you through the process of becoming a homeowner.”