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Rental Market set to strengthen as First Time Buyers hold back

Around half of first-time buyers say their prospects of owning a home are further away than ever due to the ongoing cost-of-living crisis.

Research by the Nationwide Building Society shows that 20% don’t think they will be able to buy until at least their forties – a significant increase on the current average first-time buyer age of 33.

The society’s poll of over 1,000 aspiring homeowners reveals that more than 84% say that the cost-of-living has impacted their plans. Six in 10 are postponing their homeownership plans by up to three years. 


Nationwide is continuing to call for government to provide greater support to boost homeownership through an independent review into the first-time buyer market, stamp duty reform and enabling more lending at high loan-to-income levels. Nationwide is also joining forces with the Building Societies Association and four of the UK’s largest building societies to produce a Housing White Paper this spring, outlining the solutions needed to tackle the homeownership crisis. 

When asked about what the biggest barrier was to getting that first home, nearly a third (31%) said it was saving for a deposit. However, that isn’t the only barrier, with 44 per cent pointing to an issue with affordability: 

- One in five (20%) said it was finding somewhere in their price range;

- 14 per cent said it was being able to afford the monthly repayments;

- One in ten (10%) said it was the ability to borrow enough for the mortgage.

Rachael Sinclair, Nationwide’s Director of Mortgages and Financial Wellbeing, says: “We need to solve the first-time buyer conundrum, which is why Nationwide has continually called for government to set up an independent review of the first-time buyer market. It’s why we’ll also be jointly launching a Housing White Paper with the Building Societies Association next week, which will outline the essential policy changes that are needed to tackle the homeownership crisis and support people into their first home.” 

For those that are trying to save the deposit, more than a quarter (26%) of prospective homeowners have been saving for their deposit for three to five years, with a further 10 per cent saving for six or more years.  

However, over half of respondents6 (52%) now have less money each month to save for a deposit as a result of cost challenges, while 29 per cent said financial pressures had impacted the amount of additional financial support, such as from parents. 

According to the poll, the average amount people said they had to put towards the deposit was £9,533 – far short of the £22,400 needed for a 10 per cent deposit based on the £223,554 average first-time buyer house price, according to Nationwide’s House Price Index. While more than half (52%) had up to £5,000 available for a deposit, around one in four (26%) only had up to £1,000, while 11 per cent said they had no money available to put towards a deposit. 

Eight in ten (80%) are concerned about mortgage payments, especially at a time when mortgage rates have increased and other bills have risen. 

The struggle to afford the monthly payments means many people are having to look at all the options when it comes to buying a first home, including who with and where. While more than half (57%) plan to buy with their partner or spouse, 12 per cent will look to buy with a family member. 

According to the poll, 55 per cent said they’d be willing to buy in another part of the country where house prices are cheaper, or where they could buy a bigger property, with 70 per cent of respondents being prepared to move up to 50 miles away just to buy their first home. 

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  • Sarah Fox-Moore

    Demand for rentals isnt going down any time soon. Those landlords who remain, especially those with low or no debt against the property will be the winners. Highly leveraged landlords are being forced to sell up, but its still not exTenants /exRenters buying the properties as a whole.

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    Whilst I have every sympathy with the young trying to get on the housing ladder, house prices will continue to increase until first time buyers cant afford first houses. Then the whole chain stops. So somebody must still be able to afford first time houses and I don't believe it is all landlords.
    Just a final thought, why isn't there a group of whingers called 'Generation cant afford a house', with daily bleating about their terrible plight?


    There isn’t a “Generation Can’t Buy” because they are too busy working! 😉


    Thing is they don't help themselves do they

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    The last BTL we sold was split between my two children 👍🏻💰💰 after CGT they had a huge boost to their deposits, but what about children who have parents with one house or in rentals 🫣🤔

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    It will strengthen until Labour kill off PRS.

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    Maybe we should be discussing expectations as well. I do have some sympathy with first time buyers - I was one doing it on my own. But I certainly didn't think it was sufficient to save for just 3 years and, here's a thought, how about buying a flat first? Build up some equity in that and then sell it to have a bigger deposit later down the line. This is what my manager did and worked very well.

    Why have we become a nation who assumes everything they want should be available immediately?? My neighbour's house has three bedrooms, a ground floor extension, large garden, out building and driveway that can hold three cars. Cue FTB viewing it and wanting to haggle them down. Manage expectations, take smaller more manageable steps and suddenly things become more achievable

  • Zen Landlord

    The media don't help, they're continually telling young people that they can't afford a house. They're continually going on about the average cost of a home. If they change their tune it would help massively because young people are very heavily influenced by the media. If you're constantly told you can't do something then you stop trying. A can do attitude goes a long way.
    A first time buyer doesn't need the average home, start with a flat. Get on the ladder as early as possible so that by the time you're looking to get married and settle down your in a better position. It's not that our kids are lazy and feckless, it's that the are continually told that it's impossible from an early age. We're not helping them by shoving this mantra down there throats. Give them hope and they'll know that if it's what they really want, they can archive home ownership


    They also don't have a clue how to manage finances. I learned the hard way, also influenced by my parents who were awful with money. So many problems stem from poor financial awareness, not just housing affordability, so schools really should be teaching this.


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