Hundreds optimistic about buying first home despite volatile market

THE rising cost of living, higher interest rates, and mortgage market volatility have done little to dent the enthusiasm of first-time buyers, research has found.

A biannual study of 1,000 aspiring homeowners in the UK has found 40% are optimistic about becoming a homeowner – similar to the 42% who felt optimistic last year.

And while 41% feel their homebuying plans have gone backward in the last six months, this is significantly less than the 68% who felt this way half a year ago.

Hopeful home-buyers have been buoyed by predictions of falling house prices (21%), the introduction of 100% mortgages (21%) and rising interest rates boosting their deposit funds (20%).

Nearly a quarter (24%) have managed to save more towards their deposit than anticipated, while 22% have seen their household income increase in recent months.

And 20% are feeling positive about their path towards ownership as they believe the cost-of-living crisis is slowing down.

Among those actively saving towards the deposit for their first home, they are setting aside £344 a month on average and 24% hope to buy within 12 months – down from 35% six months ago.

On average, hopeful buyers anticipate it will take another three years to get their foot on the ladder, having started saving three years ago.

Cecilia Mourain, managing director of Moneybox Homebuying which commissioned the research, said: “The property market is ever-changing but we know the volatility of the last six months to a year has been unsettling for many.

“Yet despite this, the desire to own a home has increased significantly, and pragmatic first-time buyers remain remarkably resilient, adapting to the changing market conditions and remaining optimistic as they work towards their goal.

“When it comes to buying your first home, more often than not, the right time to buy is when you are ready.

“Seeking advice from home-buying experts will help you dial down the noise, and thoroughly prepare for your home-buying journey, with greater confidence.”

The study revealed that owning a home is more important than ever for 81%, up from just 63% in 2022.

This is primarily motivated by wanting to feel more financially secure (56%), to be more independent (55%), and to have control over their own home rather than a landlord (53%).

But of course, it’s not all been plain sailing for first-time buyers in recent months – 37% report that they are feeling pessimistic about their chances of getting a foot on the property ladder.

Nearly six in 10 (58%) found the cost-of-living crisis is impacting their disposable income making it more difficult to save a deposit.

While 30% have had to reduce the amount they are saving towards their first home deposit in the last six months.

And 46% are concerned rising interest rates have been making mortgages less affordable, the research conducted via OnePoll found.

In response to these market conditions, 61% of aspiring first-time buyers have taken some pragmatic steps to adjust their home-buying plans this year.

These include planning to buy later than originally hoped (55%), building a larger deposit (34%), and making compromises on property location (32%) or features (30%).

In fact, 21% would consider a zero-deposit mortgage and 15% are open to a longer-term mortgage.

Cecilia Mourain from Moneybox Homebuying added: “Buying a home is such an important life goal for so many, it can be overwhelming trying to figure out the best options for your needs and the implications of changing market conditions.

“And so, it’s no surprise that in the last year, we’ve seen a significant increase in the number of first-time buyers, coming to us for home-buying and mortgage advice, in many cases, long before they are ready to make a mortgage application.”