"With innovations in the market and light starting to appear on the horizon, there is still a possibility that 2024 can be the year to get on the property ladder."
- Ben Thompson, deputy CEO at Mortgage Advice Bureau
Nearly a third (32%) of prospective buyers are continuing to delay their property purchases, with the number rising to 36% for first-time buyers, according to new research from Mortgage Advice Bureau.
Increased housing prices (39%), higher interest rates making monthly repayments unaffordable (29%), and the cost-of-living crisis (28%) are among the key factors impacting homebuying plans. The challenge of higher interest rates is significant, with one in four (25%) prospective buyers and 26% of first-time buyers finding it harder to get their mortgage approved due to increased costs.
To help manage these financial pressures, the research found that a fifth (20%) of prospective buyers have taken on more than one job to cope with the financial strain, with this figure slightly higher for first time buyers (22%). Additionally, one in six first time buyers (17%) have had to arrange longer mortgage terms than initially planned. The same number (17%) have also found it necessary to borrow more to afford their homes.
Other contributing factors include the cost-of-living crisis impacting credit scores (affecting 21% of prospective buyers and 25% of first-time buyers), and concerns over job security or potential redundancies (affecting 12% of prospective buyers and 13% of first-time buyers). Rent increases are also exacerbating the situation, making it more difficult for 23% of buyers overall, and a significant 36% of first-time buyers, to save for a deposit.
Only a small fraction of prospective buyers (9%) and even fewer first-time buyers (5%) report that nothing has impacted their homebuying plans.
Many prospective buyers have responded to these difficulties by adjusting their lifestyles: 42% are cutting back on luxuries and socialising (33%).
Ben Thompson, deputy CEO at Mortgage Advice Bureau, commented: “As we navigate the complexities of the current housing market, the impact of higher interest rates cannot be overstated. However, with innovations in the market and light starting to appear on the horizon, there is still a possibility that 2024 can be the year to get on the property ladder.
“Though it isn’t suitable for all applicants, mortgage products that take rent into account can be very helpful for buyers struggling with the cost-of-living and the ability to save for a deposit. Likewise, extending a mortgage term to lower your repayments doesn’t need to stay that way. In a few years’ time, you can always remortgage, and shorten your mortgage term."
