The First-Time Buyer Index, conducted both before and after the EU referendum, found similar levels of confidence from first-time buyers looking to purchase their first property in the next 12 months.
The research suggests around a million people who have never previously owned a property are planning on purchasing their first home in the coming year.
- 95% of first-time buyers say they are finding it difficult to get on the housing ladder, with almost four out of every 10 (39%) saying it is ‘extremely difficult’.
- Mortgage affordability is only a minor issue. Only 5% of respondents listed mortgage affordability as their main barrier, with fewer that one in ten (7%) of FTBs citing difficulties securing a mortgage
- Raising a deposit has overtaken property prices as the main obstacle FTBs face (39%) compared to the previous survey, up from 36%.
- Less than one in five (16%) are planning on funding the deposit from their savings without any additional help, down from 18% prior to the EU
The study, carried out by YouGov, explores how confident those currently looking to buy their first property feel, and what the biggest hurdles are when trying to get on the housing ladder.
Less than one in 10 (7%) responded that securing a mortgage was their main issue, with even fewer (5%) saying mortgage affordability was their biggest barrier.
When it comes to applying for a mortgage, nearly twice as many prospective first-time buyers are planning to apply jointly with their partner (48%), compared to just over one quarter (25%) of people doing it on their own.
First home is not a family affair
Being close to family when choosing a first property was only listed as important to a quarter of respondents (24%), with almost double choosing a garden (47%), almost two fifths choosing a drive or off road parking (38%) and a third listing double glazing (33%).
Commenting on the research, Charles Haresnape, Group Managing Director Mortgages at Aldermore, said:
“Our research, conducted both immediately before the EU referendum and after the initial period of uncertainty following the Brexit vote, shows that first-time buyers’ mind-set remains almost entirely unchanged on their plans to purchase their first property.
“First-time buyers are the driving force of the property market, and the levels of confidence and economic outlook have large-scale ramifications further up the housing chain. Tracking the changing attitudes of those looking to buy their first property is an important part in assessing how the market can be adapted to work in the best interests of all those looking to make their dream of owning their own home a reality.
“While around a million people are looking to get on the housing ladder in the next twelve months, trend data shows only around a third or so will actually achieve that goal, with the number of first-time buyers in the last two years in the region of 300,000.
“A huge focus on securing a mortgage masks the issues that many have reported in raising the initial deposit, with a large proportion unable to do so without family help at a time of rising rental costs across the country, with three quarters of respondents considering the Help to Buy (HTB) scheme. While the HTB mortgage guarantee scheme is ending in December, Aldermore will continue to support the large demand from borrowers looking for higher LTVs through the equivalent Mortgage Indemnity Scheme.
“While certain lenders offer options such as our Family Guarantee Mortgage, sluggish wage growth and the difficulty of funding a deposit are likely to be responsible for many of the two thirds who don’t manage to buy a property within a year.”
Notes to Editors:
All figures, unless otherwise stated, are from YouGov Plc. Total sample size for the initial survey was 1,181* All GB workers/ students who plan to buy their first home. Fieldwork was undertaken between 3rd - 9th June 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Figures for employment status of were based on an initial higher sample size of 8,335. Figures for those predicting the timescale for their first property purchase were based on an initial higher sample size of 5,430.
The second survey was conducted with a total sample size of 1,363* All GB workers/ students who plan to buy their first home. Fieldwork was undertaken between 5th - 9th September 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Figures for employment status were based on an initial higher sample size of 8,744. Figures for those predicting the timescale for their first property purchase were based on an initial higher sample size of 5,747.
Total figures for those in some form of work were taken from the official ONS figures as of September here.
*In wave 1 workers/students were defined as those ‘working full time (30 or more hours per week),’ ‘working part time (8-29 hours per week),’ ‘working part time (less than 8 hours per week),’ or ‘full time students.’ In wave 2 the employment question was adjusted so that the self-employed group could be identified among those working. Workers/students were defined as those ‘employed full-time (30 hours+),’ ‘employed part-time (up to 29 hours),’ ‘self-employed,’ or ‘students.’
- Journalists interested in speaking to case studies, Aldermore has a selection of customers who would be happy to speak and be photographed.
For further enquiries, journalists can contact:
Rachael Snelling, Aldermore
Phone: 0208 1853 102
Johnathan Priestley, Cicero Group
Phone: 0207 297 5954
Aldermore Group PLC is a specialist lender and savings bank offering straightforward products to Small and Medium-sized Enterprises (SMEs), homeowners, landlords and individuals, who we believe are often poorly- or under-served by the wider market.
Aldermore has no branch network but serves customers and intermediary partners online, by phone and face to face through its network of regional offices located around the UK.
Building on its core values of being reliable, expert, dynamic and straightforward, Aldermore aims to deliver banking as it should be.
Established in 2009, Aldermore has grown significantly. At the end of March 2016, lending to customers stood at £6.5 billion and customer deposits totalled £6.2 billion.
For more information, please visit www.aldermore.co.uk.