Two in five aspiring first-time buyers deterred from housing market – Perenna

The challenging experience of securing a mortgage has deterred two in five (42%) aspiring first-time buyers, research from Perenna has revealed.

Nearly two-thirds (62%) of first-time buyers have faced difficulties securing a large enough mortgage.

London was hit hardest, with 65% of first-time buyers affected, where property prices are 34% higher than the UK average.

Income-related difficulties were also prevalent, with 68% of first-time buyers experiencing challenges securing a mortgage due to their income level.

The average house price in England was found to be eight-times more expensive than the average individual income.

Half (50%) of first-time buyers said that they delayed major life events such as marriage, starting a family, or changing their job to fulfil their dream of homeownership.

20% of respondents said they would consider opting for longer-term mortgages, with a fixed term over 10 years.

Nearly three-quarters (72%) agreed that if a mortgage provided them a home, without the risk of repayments shooting up, it would give them confidence in stepping onto the homeownership ladder.

Two in five (40%) said mortgage lenders must better support first-time buyers by allowing greater borrowing power, and 48% agreed that if there was a mortgage that allowed them to borrow more to buy, they would find this attractive to consider. 

Arjan Verbeek, CEO and co-founder of Perenna said, “It’s a travesty younger people are put off from one of the most rewarding experiences in life, becoming a homeowner.

“Seeing mortgage payments shoot up for millions of people because of how traditional mortgages work will of course put off many would be homebuyers.

“We need to change this trajectory urgently.”

He added: “We believe everyone deserves a chance to own their home and enjoy living in it without worry.

“Longer-term fixed-rate mortgages are part of this solution, providing greater borrowing power, and stability through payments that don’t shoot up, a far cry from the way traditional high street mortgages work.

“Perenna’s goal is to make homeownership a reality for first-time buyers and make us a nation of happy homeowners.”