A total £5bn worth of property deposits is currently in limbo as first-time buyers “struggle to navigate” the housing market, according to research from Trussle.
The online mortgage broker suggested that 69% of first-time buyers are currently priced out of the market, not only considerably slowing it but potentially stalling any market recovery as well.
Trussle’s study, which surveyed 2,000 first-time buyers in the UK, revealed that over half of first-time buyers take more than five years to save enough for a deposit. With 72% of first-time buyers in a position to look for a home within the next two years, the broker said it is “no surprise” that 44% of respondents feel confused by the market’s changing deposit requirements and lender criteria.
The broker also found that 76% of first-time buyers feel “worried, confused and angered” at how COVID-19 has affected their home ownership aspirations. Another 65% feel it is “impossible” to get on the property market while 62% have admitted defeat and opted to save for another year or more, the research found.
Trussle head of mortgages, Miles Robinson, commented: “While it’s encouraging to see the property market remaining open for business with viewings and valuations remaining in place during the second lockdown, it’s disappointing that first-time buyers are struggling to navigate the market.
“One option for first-time buyers is to adapt expectations when it comes to location, exploring more affordable areas and seeing the working from home option as a long term alternative. However, the onus cannot continue to sit purely on the first-time buyer and their transactional power cannot remain untapped as we head into an uncertain 2021.
“The financial impact of the pandemic has meant that lenders are pulling a number of high LTV mortgages. As of this week, there are only 74 mortgage deals available for mortgage applicants with a LTV over 90%. By comparison, this time last year there were over 2,000.
“We’d like to see lenders beginning to reintroduce higher LTV products that will help first-time buyers.”
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