Some 32% of prospective buyers and 36% of first-time buyers are pushing back their purchases due to high costs and interest rates, research has found.
According to research from the Mortgage Advice Bureau (MAB), which surveyed 1,003 prospective homebuyers, 39% said that heightened house prices were a key factor impacting their property purchase.
This was followed by 29% mentioning high interest rates increasing monthly mortgage payments and 28% pointing to the cost-of-living crisis.
Around a quarter of prospective buyers and first-time buyers said that high interest rates had made it more challenging to get approved for a mortgage due to increased costs.
MAB found that a fifth of prospective buyers had taken on more than one job to cope with financial pressure, rising to 22% of first-time buyers.
Around 17% of first-time buyers have selected a longer mortgage term and a similar number said it was necessary to borrow more to back their property purchase.
Approximately 21% of prospective buyers and 25% of first-time buyers said the cost-of-living crisis’ impact on their credit scores was delaying their property purchase plans, and concerns over job security or potential redundancies were cited by 12% of prospective buyers and 13% of first-time buyers.
Rent increases were another factor in delayed property purchase plans, with 23% of prospective buyers saying rent rises were making it more difficult to proceed with their home buying plans, followed by 36% of first-time buyers.
Only 9% of prospective buyers and 5% of first-time buyers said that nothing was impacting their property purchase plans.
Buyers shouldn’t try to ‘time the market’ for property purchase
Ben Thompson, deputy CEO at MAB, said that the “impact of higher interest rates cannot be overstated”.
He continued: “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 can always remortgage, and shorten your mortgage term.”
Thompson said that it was important that buyers “don’t try [to] time the market, as it’s nearly impossible to time the property market at the perfect sweet spot”.
“If you’re able to buy a property you like, go for it. For those not yet at the stage to sign on the dotted line or just starting out on the journey to homeownership, using a mortgage calculator can help you estimate how much you can comfortably borrow upfront, giving you a head start in your property search.
“It takes a lot of time to get all your ducks in a row, so starting now and getting advice to become mortgage ready is key,” he said.
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
