In 1974, the average first-time buyer could save a property deposit in just three months. Today, that same goal takes more than 11 years. Le that sink in. Santander’s figures from their latest market update starkly illustrate the affordability crisis facing first-time buyers in 2024.
The Top Three Barriers
In their report, Santander highlighted the top three barriers to homeownership at the moment.
- Raising a deposit – skyrocketing property prices relative to wages means that it is so much more difficult to squirrel away money for a deposit per month.
- Affordability and monthly repayments – even with rate reductions, costs remain high and people are struggling to be able to comfortable make larger mortgage payments.
- Access to large enough mortgages – tougher lending criteria and income limits means that lenders are still being cautious about who they lend to and how much they are comfortable with lending.
The True Cost of Homeownership
Even when buyers manage to secure a mortgage, the average payment still consumes over one-third of their take-home pay. That’s before accounting for utilities, council tax, food, or other living costs.
Why Income Protection Matters
Santander stresses the importance of protecting income. If a client becomes unable to work, keeping up with those mortgage payments quickly becomes impossible. For advisers, discussing protection alongside mortgages isn’t just good practice, it’s essential financial planning.
The Bigger Picture
While challenges remain, understanding them helps buyers plan more effectively. It’s about budgeting early, seeking professional advice, and taking advantage of the improving lending conditions expected through 2025.
Speak to a Mortgage Adviser
Investing in the property market has always been and continues to be a great way to invest your money and build your wealth. If you are looking to purchase a property and need to discuss your mortgage options, please feel free to contact our team of mortgage experts at Oportfolio Mortgages, today.
