One in 20 first-time buyers are worried that if they manage to get onto the property ladder, they’ll have nothing left to live on, research by Yorkshire Building Society has found.
A further one in 10 claim that if they were to buy a property, they’d expect to be left with less than £200 left to live on each month. Around two-thirds 64% said they feared if they bought, they wouldn’t have anything left to save each month.
Despite the financial challenges that first-time buyers face, more than half (55%) said they still want to own their own home so that they can stop wasting money on rent. Ben Merritt, the building society’s director of mortgages, said: “Yet again, this latest research shows that they want to own and are prepared to change their lifestyles to achieve it; they simply want to be able to afford a reasonable quality of life as well, which doesn’t seem like too much to ask from where we’re standing.
“Although nothing is certain in a volatile market like the one we’re continuing to experience, and we are seeing ongoing fluctuations in interest rates, we hope that they will continue to settle out overall and this will help ease one problem for first-time buyers, which is meeting their monthly mortgage payments.”
Nine in 10 of those questioned said they will have to sacrifice something to afford their mortgage, with the most common cost cuts being holidays and travel (42%), dining out (36%) and buying new tech (27%).
Options to help first-time buyers achieve their home ownership dreams
The good news is that several lenders, including Yorkshire Building Society, offer mortgage products specifically designed to help first-time buyers. Yorkshire’s £5k Deposit Mortgage, for example, as the name suggests, only requires first-time buyers to put down deposit of £5,000. They can then borrow up to 99% of the property value, provided the home they want to buy costs no more than £500,000. This scheme can’t be used by buyers purchasing flats or new build homes.
Nationwide similarly provides the Helping Hand scheme, which enables first-time buyers with just a 5% deposit to borrow up to six times’ their income when taking outa five or 10-year fixed rate.
Other lenders offering support for first-time buyers include Halifax, with its First Time Buyer Boost mortgage enabling buyers to borrow up to 22% more than the bank would normally lend. To qualify, at least one person applying must be a first-time buyer, and buyers must have a deposit of 10% or more to put down. The total household income of everyone applying must be at least £50,000.
If you’re struggling to save more than 5% of the property value, however, there are several lenders who are prepared to offer 95% mortgages, so there should still be options available to you. Seek mortgage advice if you’re not sure which deal is likely to be right for you.
