There is a marked difference between the expectations of those hoping to get on the housing ladder and the reality, according to the study from the Clydesdale Bank and Yorkshire Bank.
The Banks’ Annual First Time Buyers Survey found that 67% of those looking to buy their first home badly underestimate how long it will take to achieve their goal. Half of those surveyed said that it had actually taken anything up to three years longer than they had anticipated.
The research suggests that expectations have changed over the last 30 years or so. Older respondents aged 55 and over were almost three times more likely to have bought their first home within their expected time frame than those in their late twenties and early thirties, and twice as likely as the youngest first time buyers under the age of 24.
While first time buyers in London were most likely to have seen the reality take longer than they had envisaged at 76%, the pattern regionally did not simply match up to house prices. The Midlands, Wales and North West were all more likely than the UK average to feel that things took longer than they had hoped. Buyers in Scotland were most likely to have achieved their first home purchase within their timeline, with just under half believing it took as long or less than they’d planned.
The research also showed that there were four main factors in the time it took buyers to get on the housing ladder. And, rather than it being the process itself that creates the delay, financial matters dominate potential first time buyers’ thinking and actions when looking to buy.
Almost a quarter, 23%, worry about getting a mortgage in the first place, closely followed by 20% looking to put together enough deposit, and one in six for whom job security means they don’t want to take on the commitment of a mortgage. But for about a fifth of first time buyers what takes time is finding the right property.
Across the regions there was some variation in how these for key factors affected the timing for potential first time buyers. In London the top factor was securing a mortgage with 27% citing this as the main issue followed by 20% delayed by not finding the ideal home, 16% by job security issues and 14% by saving for a deposit. The last figure is interesting as first time buyers in London generally needed higher deposits due to the higher prices in the city but it is the least cited reason for delaying their first purchase.
But in Wales saving for a deposit is the most common reason at 30%, followed by securing a mortgage at 22%, and then job security and finding the right home both at 13%. Saving for a deposit was also the main issue for first time buyers in the South East at 29% with 24% citing job security and the right property and 20% securing a mortgage.
But only 4% of first time buyers in the East of England said securing a mortgage was a problem while 26% said it was saving a deposit. Saving for a deposit was less of an issue in Scotland where just 14% said it was a concern but 23% said securing a mortgage was.
The research also found that for a quarter of first time buyers it takes one to two years to put together their deposit, but for 35% it took three years or more. With a 95% and average deposit of around £7,500, first time buyers need to save at least £300 each month just to get that together within two years. Other costs, like legal fees and furnishing their home can easily double the amount required, meaning saving more or for longer.
‘Buying your first home is a big step and a major commitment, making sure you plan well ahead has never been more important. Planning starts with saving, the sooner you start the easier it is and the less you have to put away each month,’ said Andrew Pearce, retail director for Clydesdale and Yorkshire Banks.
‘Even with 95% mortgage, the average first time buyer needs to put together over £7,000 for their deposit. And that’s before the cost of valuations, legal fees and furnishing their home,’ he added.
