Nearly a third (32 per cent) of prospective buyers are delaying their property purchases, research from the Mortgage Advice Bureau has found.
The research, which surveyed over 1,000 prospective buyers, found increased housing prices, higher interest rates making monthly repayments unaffordable, and the cost-of-living crisis were the key factors impacting buying plans.
The challenge of higher interest rates was also found to be “significant” as 25 per cent of prospective buyers and 26 per cent of first-time buyers find it harder to get their mortgage approved due to increased costs.
MAB deputy CEO, Ben Thompson, said: “As we navigate the complexities of the current housing market, the impact of higher 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.
“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 always remortgage, and shorten your mortgage term.”
Other contributing factors, according to the research, included the cost-of-living crisis impacting credit scores, affecting 21 per cent of prospective buyers and 25 per cent of first-time buyers, and concerns over job security, affecting 12 and 13 per cent.
Rent increases are also exacerbating the situation, making it difficult for 23 per cent of buyers overall, and a significant 36 per cent of first-time buyers, to save for a deposit.
Only a small fraction of prospective buyers, 9 per cent, and first time-buyers, 5 per cent, report that nothing has impacted their homebuying plans.
To help manage these financial pressures, the bureau’s research found that 20 per cent of prospective buyers have taken on more than one job to cope with the financial strain.
Additionally, one in six first time buyers have had to arrange longer mortgage terms than initially planned.
The same number have also found it necessary to borrow more to afford their homes.
tom.dunstan@ft.com
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