We all know how difficult it can be to take that all-important first step on the ladder, but new research from Clydesdale and Yorkshire Banks has delved a little deeper to highlight the challenges that renters face in their quest to become homeowners.
The new figures show that 64% of aspiring homeowners rent a property before they pick up the keys to their first home, and perhaps unsurprisingly, saving for a deposit was cited as one of the biggest financial hurdles these would-be buyers face – particularly when you consider that the average monthly rent stands at £681.70.
Not only that, but renters are less likely to benefit from help from family, with only 41% receiving any financial assistance, compared with 62% of those who lived with their parents or family members before buying. The latter group also have it easier when it comes to rent, with 21% not paying any at all when living with friends and family, meaning they can put the cash towards their deposit instead.
Not all of them are rent-free, however, with 52% paying a fixed amount every month to their family landlords, while 22% contribute towards food and bills. Others simply pay what they can afford on a monthly basis, offering a more flexible approach. These family renters could also find the process a lot less stressful: 28% of those living in rented accommodation admit that they put themselves under pressure to get on the property ladder, compared with just 16% of those still living at home.
"Buying a first home is one of life's most significant financial milestones," said Steve Fletcher of Clydesdale and Yorkshire Banks, with the research highlighting the "many different challenges that aspiring homeowners can face when they are hoping to invest in their first property". But, whether you're renting or living with your parents, there are things you can do to make the dream a reality – and the first step will always be building a suitable deposit.
It may seem difficult, particularly if you're renting, but saving as much as you can on a monthly basis is key. It may mean a few sacrifices, but it could be well worth it, and you can see the difference those sacrifices could make by putting the money you would have spent on that takeaway or night out (for example) into a dedicated savings account.
For this purpose, you may want to consider a notice account that'll let you add funds as necessary but will require notice before you can access your cash, as that way, you may avoid the temptation of spending unnecessarily. Or, if you really want to get in the savings habit, what about a regular savings account?
Then it all comes down to finding the right mortgage to suit your needs, and luckily, the mortgage market is booming at the moment. The number of first-time buyer mortgages available means you may only need to amass a 5% deposit to take that first step, and if you do your research and find the right deal, you could secure a great rate that'll help keep your repayments in check, too. Happy hunting!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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