A third of prospective home movers and first-time buyers are delaying property purchases with many blaming high house prices, a poll from Mortgage Advice Bureau shows.
The broker network found that 32% of home movers had put the brakes on moving, rising to 36% among those who plan to get onto the property ladder.
The cost of buying a home was cited by 39% of those asked, followed by higher interest rates making monthly repayments unaffordable, 29%, and the cost-of-living crisis, 28%, are the biggest factors for pushing back homebuying plans.
High interest rates were singled out as “significant”, with one in four prospective buyers and a slightly higher 26% of FTBs.
To manage these financial pressures, 20% of prospective buyers have taken on more than one job, rising to 22% among FTBS.
The survey finds that 17% of FTBs have had to arrange longer mortgage terms than initially planned.
The same percentage found it necessary to borrow more to afford their homes.
Other factors affecting home affordability include the cost-of-living crisis impacting credit scores – this hit 21% of prospective buyers and 25% of FTBs.
Also, concerns over job security or potential redundancies affected 12% of prospective buyers and 13% of FTBs.
The study found rent increases “exacerbated the situation”, making it more difficult for 23% of buyers overall, and 36% of FTBs, to save for a deposit.
UK house prices rose 0.3% month on month to £266,334 in July, but the annual growth rate picked up to 2.1%, according to the latest Nationwide data.
The Bank of England cut interest rates by 0.25% to 5% earlier this month, its first reduction in four and a half years.
Mortgage Advice Bureau deputy chief executive Ben Thompson says: “As we navigate the complexities of the current housing market, the impact of higher interest rates cannot be overstated.
“However, with innovations in the market and light starting to appear on the horizon, there is still a possibility that 2024 can be the year to get on the property ladder.
Thompson adds: “Though it isn’t suitable for all applicants, mortgage products that take rent into account can be very helpful for buyers struggling with the cost of living and the ability to save for a deposit.
“Likewise, extending a mortgage term to lower your repayments doesn’t need to stay that way. In a few years’ time, you can always remortgage, and shorten your mortgage term.”
Mortgage Advice Bureau’s poll was conducted by data firm Censuswide with 1,003 prospective homebuyers, looking to buy over the next two years, between 4 June and 10 June.
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