First-time home buyers are experiencing anxiety over their finances post-purchase according to a Yorkshire Building Society report.
- A tenth of first-time buyers anticipate having under £200 monthly after buying a home; a twentieth believe they will have nothing left.
- Two-thirds are anxious about their ability to save after purchasing a home.
- Despite concerns, over half of potential buyers are keen on homeownership to reduce rent expenses.
- Calls for enhanced education and support for managing finances are growing among first-time buyers.
According to a report by the Yorkshire Building Society, many first-time buyers are grappling with significant financial worries following the acquisition of their homes. One of the most startling statistics from the report is that 10% of these buyers expect to have less than £200 remaining each month after settling their mortgage and living expenses. Alarmingly, a small but noteworthy segment, about 5%, foresee having absolutely nothing left on which to live.
Furthermore, a considerable two-thirds of respondents voiced concerns about their future savings ability post-home purchase. This apprehension underscores the financial tightrope many new homeowners find themselves on, balancing homeownership with the cost of living.
In an intriguing contrast to these concerns, 55% of those surveyed indicated a strong desire to purchase a home, primarily motivated by the wish to stop ‘wasting money’ on rental payments. This paradox highlights the enduring appeal of homeownership despite the perceived financial hurdles.
Ben Merritt, the director of mortgages at the Yorkshire Building Society, emphasised the need for the mortgage industry to seize this opportunity to assist first-time buyers. He stressed the importance of providing education and tools, such as the Doshi tool, to navigate the complexities of both buying and selling a home effectively.
Predictions of falling interest rates over the next 18 months are seen as a potential relief for these buyers, with expectations of reduced monthly mortgage payments. Merritt also noted that improved affordability could benefit newcomers in overcoming challenges posed by high house prices and living costs, suggesting a possible revival of initiatives similar to the former Help to Buy scheme.
Additionally, the survey highlighted that 32% of respondents called for increased affordable housing from the Government, 40% desired lower interest rates, and 33% advocated for more flexible mortgage repayment options.
Expressing admiration for the determination shown by these buyers, Merritt reflected on their willingness to adjust lifestyles to achieve homeownership, all while aspiring for a reasonable quality of life. His remarks underscore the necessity of addressing the holistic needs of first-time buyers, ensuring that homeownership becomes a positive chapter in their lives.
The findings indicate a clear need for systemic changes to support first-time buyers in achieving sustainable homeownership.
