After what has been an extremely turbulent year for many, both emotionally and financially, it’s no surprise that the housing market has seen some ups and downs in 2020. With things finally levelling out again in terms of stability and being able to proceed with home purchases in a way that’s more familiar, we wanted to know what people were seeing as obstacles to homeownership so that we could help build a basis for a stronger 2021.
We ran a public opinion survey to hundreds of people involved in a finance advice forum who by their own admission found saving for a deposit difficult.
What were the top reasons for buyers (particularly first-time buyers) finding buying a home difficult?
What Did We Find?
Taking into account hundreds of very personal accounts of struggles with savings, the most common fell into one of these categories.
1️⃣ The huge void between house price rises and stagnant wages.
3️⃣ Constantly changing goalposts for deposit %’s and products available.
4️⃣ Family – You can’t predict where you might be in 5 years.
6️⃣ Financial commitments impacting affordability.
7️⃣ Being single (and the 4.5x salary lending limit.)
8️⃣ Pressures from social media to “have it all”.
Other issues included lack of financial education, impulse purchases and choosing short term purchases over longer-term saving.
When you look at these reasons in more depth and over a longer period of time, it’s clear to see that many people feel stuck when it comes to having the disposable income to save for a deposit, and this list will feel relatable for a lot of people who have gone through the process of getting a mortgage.
Many are not fortunate enough to be able to live with parents, friends or relatives to allow them to save up, and it’s quite clear that this is impacting savings. In fact, a YouGov survey found that although 1 in 5 renters were saving for a deposit, over a third (36%) currently have savings of £500 or less. A quarter of respondents claimed to be renters also stated they had less than £125 of disposable household income each month, and 14% said they had none at all – a huge issue. With the average deposit in today’s market at around 20%, it’s easy to see why many are some way off being in a position to buy.
*This focus group study was conducted online and allowed anonymity where respondents felt more comfortable to share their situation.