Six in 10 first-time buyers (58%) say that saving up a deposit is the main barrier they face when trying to get onto the property ladder, according to research carried out by the Building Societies Association (BSA).
Nearly a third (29%) of those who’ve yet to buy a home think they’ll never be able to afford to do so, the Association’s latest Property Tracker for October shows, with more than half (54%) citing the cost of monthly mortgage payments as a hurdle. A further 47% claim that not being able to borrow enough is preventing them from buying a property.
Separate research from the BSA found that since the 2008 financial crisis, 2.2 million prospective homebuyers who might otherwise by now have bought their own home have been unable to do so.
Stamp duty adds to first-time buyer challenges
Although first-time buyers don’t pay stamp duty on properties up to £300,000, rising property prices mean that stamp duty is increasingly an issue for first-time buyers, as it is payable at a rate of 5% on the portion between £300,001 and £500,000 and at higher rates above this.
More than a quarter (26%) said stamp duty tax is now an obstacle to buying a home, over three times the number that said it was a barrier in 2022. There has been speculation that the Chancellor Rachel Reeves may look to make changes to property taxes in the forthcoming Budget, which may be prompting some buyers to hold fire on their purchases until after it is announced on November 26th.
Home-buying complexity
Buyers also find the home-buying process overly complex, with 14% citing this as an impediment to buying, up from 10% in July.
Paul Broadhead, Head of Mortgage and Housing Policy at the Building Societies Association, said: “For too many people, the dream of owning a home has turned into a sense of defeat. The financial barriers are well known, but it’s clear that policy uncertainty and the complexity of the process are now part of the problem too.
“Speculation about changes to property taxes may grab headlines, but it risks damaging confidence and creating unnecessary volatility. What buyers need most is stability, not stop-start interventions that distort the market.”
