Aldermore bank’s latest First Time Buyer Index1, a survey of 2,015 prospective and 500 actual first time buyers, reveals that first time buyers that have bought their home in the 18 month period since March 2020 have experienced an increasingly expensive process, stretching them to raise additional tens of thousands in funds.
Over half (58%) of first time buyers needed to raise a larger deposit than initially intended, due to the impact of Covid-19 pandemic. The average increase was an additional £22,849, bringing the deposit size up to £62,572 (an average of 18.6% of the property value). It took first time buyers who bought since the beginning of the pandemic an average of nearly five years (4.6 years) to save up enough.
The process of buying has become more complicated during the 18 month period after the pandemic began with delays and false starts increasing the challenges and expense. Even having an offer accepted took multiple attempts for many; two in five (40%) took two or more offers to secure the home they bought stretching out the process and raising costs. And prior to that, half (49%) were in the process of buying a different property only to have it fall through. This cost new buyers an average of £2,403, with one in nine (12%) spending £4,000 or more.
Increased challenges and delays meant first time buyers say they were delayed by an average of 3 months, with one in six (16%) being delayed by over five months or more.
These extra barriers and costs meant that nearly half (48%) felt they did not get the home they wanted because they had to compromise so much to get on the housing ladder. Meanwhile, the financial impact forced over half (52%) to leave their house empty for a few months because they were unable to afford furniture immediately. The stress of the house buying process also affected people’s personal lives, with nearly half (46%) saying that the process caused issues in their relationship.
Excluding raising of the deposit, often overlooked are the other costs associated with purchasing a property, including solicitor and moving fees. These extra fees set the average first time buyer back a total of £4,486.
| Additional costs of buying a home | Average per first time buyer |
| Solicitor fees | £767 |
| Mortgage fees | £611 |
| Conveyancing fees/valuation | £577 |
| Moving fees i.e. van hire, moving company hire | £477 |
| Rent paid due to delays in moving into your home | £528 |
| Estate agent fees | £544 |
| Other | £521 |
Jon Cooper, head of mortgage distribution at Aldermore said: “Becoming a home owner is a wonderful step forward in a person’s life but our research shows the persistent effects of the pandemic are causing high levels of financial challenges in the journey. While costs and complicated processes may feel daunting, we’ve found first time buyers are glad they did it, with 78% saying the stress was worth it to find a home. I would advise would-be buyers to plan carefully to ensure they are prepared for the range of costs involved and to seek a broker who can be a great help in cutting through the jargon and guiding you through the process.”
At Aldermore, we know the difficulties first time buyers face in raising a deposit, so we have complied our top tips to help those looking to achieve their homebuying dreams.
**Ends**
1Research conducted, on behalf of Aldermore bank, by Opinium in September 2021, with a nationally representative sample size of 2,015 Prospective First-Time Buyers and 500 actual first time buyers, that purchased a home from March 2020.
For further information, journalists can contact our PR Team.
For further information about Aldermore, please review our Notes to Editors page.
Follow us on Twitter: @AldermoreNews