19 June 2023: The rising cost of living, higher interest rates, and mortgage market volatility have done little to dent the enthusiasm of first-time buyers, Moneybox research has found.
A biannual study of 1,000 aspiring homeowners in the UK, has found that 40 per cent are optimistic about becoming a homeowner – similar to the 42 per cent who felt optimistic last year.
And while 41 per cent of respondents feel their homebuying plans have gone backward in the last six months, this is significantly less than the 68 per cent who felt this way half a year ago.
Hopeful home-buyers have been buoyed by predictions of falling house prices (21 per cent), the introduction of 100 per cent mortgages (21 per cent) and rising interest rates boosting their deposit funds (20 per cent).
Nearly a quarter (24 per cent) have managed to save more towards their deposit than anticipated, while 22 per cent have seen their household income increase in recent months.
And 20 per cent 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 per cent hope to buy within 12 months (down from 35 per cent 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 per cent, up from just 63 per cent in 2022.
This is primarily motivated by wanting to feel more financially secure (56 per cent), to be more independent (55per cent), and to have control over their own home rather than a landlord (53 per cent).
But of course, it’s not all been plain sailing for first-time buyers in recent months – 37 per cent report that they are feeling pessimistic about their chances of getting a foot on the property ladder.
Nearly six in 10 (58 per cent) found the cost-of-living crisis is impacting their disposable income making it more difficult to save a deposit.
While 30 per cent have had to reduce the amount they are saving towards their first home deposit in the last six months.
And 46 per cent are concerned rising interest rates have been making mortgages less affordable, the research conducted via OnePoll found.
In response to these market conditions, 61 per cent 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 per cent), building a larger deposit (34 per cent), and making compromises on property location (32 per cent) or features (30 per cent).
In fact, 21 per cent would consider a zero-deposit mortgage and 15 per cent 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.”
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About Moneybox Homebuying:
Moneybox Homebuying is a free service from the market-leading app-based digital wealth manager, that helps make home-buying easy, from first step to doorstep. A team of 14 experienced advisers and case managers are on hand at every stage of a customer’s journey, providing expert guidance and support throughout, alleviating much of the administrative burden in what can be a very stressful and time-consuming process. This service is available for free to first-time buyers, ‘next time buyers’ and those looking to remortgage, with customers able to generate a “Mortgage in Principle”, apply for a mortgage, and track their progress, all within the Moneybox app. Moneybox Mortgages Ltd. (MML) is an appointed representative of Mortgage Advice Bureau, the UK’s leading mortgage intermediary brand. Mortgage advisers do not work on a commission basis but are paid a competitive set salary to promote impartial advice.
Moneybox mortgage advice is provided by Moneybox Mortgages. Moneybox Mortgages is a trading name of Moneybox Mortgages Ltd which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority. Moneybox Mortgages Ltd. Registered Office: Suite 1.07, 1-2 Hatfields, London, United Kingdom, SE1 9PG. Registered in England No 12954235.
Moneybox is the award-winning app on a mission to help people build wealth with confidence so they can enjoy life, today and tomorrow. Launched in 2016 by co-founders Ben Stanway and Charlie Mortimer, the company has experienced rapid growth, and today has over £4bn in AUA and supports a community of more than 1 million customers. Moneybox provides a range of great value products and services, across saving, investing, home-buying, and retirement as well as helpful tools and educational content, to help people manage and achieve their short, mid, and longer-term financial goals. Moneybox enables customers to set money aside in the way that suits them best using round-ups, regular deposits, or instant payments. In March 2022 Moneybox raised £35m in a Series D funding round, led by Fidelity International Strategic Ventures, existing investors Oxford Capital, CNP, Burda and Breega, plus new investor Polar Capital. This brings total funds raised by the digital wealth manager to £100+ million.
Joanne Leahy, PR & Comms Lead, Moneybox