First-time buyers need to raise an extra £22,849 to buy their first home because of the ongoing impact of the pandemic, new research has found.
Findings from Aldermore bank suggested that this average increase in the size of a deposit required to buy a first home has climbed to £62,572 – an average of 18.6% of the property value.
Aldermore bank’s latest First Time Buyer Index, a survey of 2,015 prospective and 500 actual first-time buyers, revealed that more than half (58%) of them are needing to raise a larger deposit than initially intended, due to the impact of COVID-19.
The research also indicates that it has taken first-time buyers who have bought since the beginning of the pandemic an average of 4.6 years to save up enough.
According to Aldermore’s research, the process of buying has become more complicated during the 18-month period since the pandemic began, with delays and false starts increasing the challenges and expense. Even having an offer accepted has taken multiple attempts for many, with the study finding that two in five (40%) took two or more offers to secure the home they bought, stretching out the process and raising costs.
Prior to that, around half of first-time buyers (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.
Commenting on the research, Aldermore head of mortgage distribution, Jon Cooper, said: “Becoming a homeowner 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.”
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