First-time buyers expect to spend £233,000 to get on the property ladder.
New research from NatWest indicates that a third (33%) of aspiring first-time buyers are turning to side hustles to boost their income and achieve their homeownership dreams. As affordability challenges persist, many are also cutting back on luxuries (57%) and making significant lifestyle sacrifices to get on the property ladder, according to the NatWest First-Time Buyer Insight Report.
The report highlights the growing determination among young people to get onto the property ladder with one in ten (10%) moving back in with family to accelerate the rate at which they are able to save.
The research also fo
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und that those planning to buy their first home in the near future are expecting to spend just over £233,000 to complete their purchase.
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However, the average spend by a first-time buyer in the past five years is a little over £264,000, indicating that prospective first-time buyers may be underestimating the cost of their first home by an average of about £30,000.
To assist first-time buyers, NatWest recently launched the Family-Backed Mortgage, an innovative new product that allows a prospective homeowner to boost their borrowing potential by adding the salary of a friend or family member to their mortgage.
While innovative products are helping, the process for a first-time buyer can still be difficult. The research shows that 31 per cent of first-time buyers cite a lack of support with paperwork and documentation, and 29 per cent desire more clarity from mortgage lenders, government support and information from estate agents.
Many first-time buyers begin their journey online, with 67 per cent of potential home buyers starting their research on property listing apps and 61 per cent on estate agency websites. Notably, 21% of 18–24-year-olds are turning to TikTok for information.
The research also indicates that a lack of familiarity with essential expenses beyond the property price itself is contributing to budget gaps for many first-time buyers.
The research highlighted a knowledge gap on fees and costs associated with buying and owning a home, suggesting first-time buyers need clearer guidance and resources on this.
Key costs that first-time buyers need to plan and budget for, such as stamp duty (57%) and legal fees (56%), weren’t familiar to nearly half of those looking to buy in the next two years.
First-time buyers also appear to expect a more extensive viewing process, anticipating 3-4 viewings on average. However, the reality is that recent first-time buyers only viewed properties an average of 2-3 times before completing their purchase.
Barry Connolly, Managing Director, Home Buying & Ownership at NatWest Group, said: “Our research highlights the resourcefulness of first-time buyers, with a third now using their side hustle to fuel their property dreams.
“At NatWest, we see this trend first hand and we are committed to providing the support and tools that first-time buyers need, including financial guidance and resources for accurate cost assessment.
“We understand the need for greater support, particularly with paperwork, understanding costs and navigating the complexities of the mortgage market. That’s why we have trained mortgage advisors available to help over the phone, via video or in branch.
“We also have online resources like our First Time Buyer Guide and mortgage calculator to help aspiring homeowners understand the costs and assess affordability.
“NatWest also offers solutions like our new Family-Backed Mortgage, which helps first-time buyers get on the ladder with support from family or friends, boosting their borrowing power while retaining independence.”