Aspiring first-time buyers risk health and wealth

First Time Buyer Index
First Time Buyer Index

The home buying process for first-time buyers still presents challenges. With half of new homeowners saying the buying process made them ill, Damian Thompson, director of mortgages, at Aldermore, asks how we can better support them

Despite measures to support first-time buyers– including Help to Buy and the scrapping of Stamp Duty up to £300K – many still struggle, to the extent that it impacts their health.

Aldermore’s latest research shows that over half (52%) of recent first-time homebuyers admit their health suffered during the purchasing process, up significantly from 35% in 2017.

The aspiration to still purchase a home means that 72% of people said the challenges were worth it. The question for Aldermore is; how can we make it less stressful?

Why so stressful?

The challenge of buying your first home often starts with saving the deposit, cited as the biggest obstacle by two in five first-time buyers. From this point it takes them an average six years to make it onto the ladder.

Even once ready to apply for a mortgage, it’s not plain sailing. A quarter (25%) of first-time homebuyers were refused a mortgage when they initially applied through their bank.

Those who get an offer accepted are also on tenterhooks. Nearly half of first-time buyers (48%) have had at least one property purchase fall through; in London this rises to 73% - a costly waste of hard-earned savings.

The price they really pay

As well as causing stress and anxiety, property woes are impacting on relationships and careers.

In 2018, over four in 10 recent first-time buyers said the process caused issues in their relationships, while 43% gave up being self-employed due to difficulties securing a mortgage. At Aldermore, this is something we feel passionate about, which is why we accept one year of accounts for the self-employed.

How can we help?

When Aldermore asked recent homebuyers what would make it easier for those in the future, four in 10 said Help to Buy should be extended, while a quarter reckon better first-time buyer mortgage products are needed.

We know that first-time buyers are not a one-size-fits-all group. They are more diverse than ever and need a range of solutions that reflect their differences.

Aldermore considers each case on an individual basis and offers products to cater to varied needs, whether they have a low deposit, family guaranteeing their mortgage or are self-employed.

This common-sense and personal approach is needed to build a healthier housing market.

That’s bad for them and bad for the housing market.

Affordability constraints still prevent many from buying and that’s bad for them and bad for the housing market. Our survey reported that first-time buyers found becoming home owners empowering but we need to educate more home buyers on the availability of specialist lenders to meet their needs.

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