Common barriers keeping first-time buyers off the property ladder


Getting on the property ladder is regarded as one of the key milestones of life here in the UK. Young adults are encouraged to plan for their future, both in terms of career paths and looking to buy their first home. Consistent demand for property has seen the average house price skyrocket over the last 2 decades. The impact of the pandemic and government policies have further exacerbated this rise, leaving first-time buyers further to reach to secure their first home. Existing properties and new build homes are in high demand, but there are several major barriers preventing first-time buyers from getting a foot on the ladder. What are these and what issues are they causing?

Saving for a deposit

One of the fundamental problems facing prospective first-time buyers is the process of saving for a deposit. The rising cost of living and private renting is a major barrier, particularly to younger adults. Private rental prices continue to soar across many regions of the UK, leaving tenants with less disposable income from which they can save for a house deposit. London and the South East are the most expensive places to rent, but other regions have similarly increased in recent years.

For many private tenants, there must be a trade-off between their standard of living and saving towards a house deposit. With a rising cost of living as well, tenants are finding it even harder to contribute towards their saving goals. Rental prices have also caused more young adults to live with their parents for longer, which is one of the only options available for people wanting to save for a house deposit more quickly.

Property prices

Saving for a deposit is one thing, but rising house prices are another barrier that first-time buyers are struggling to grapple with. As mentioned before, average house prices have been rising steadily for almost a decade – making them less affordable for first-time buyers who need larger deposits and higher incomes to be accepted for mortgages.

The property market is greatly influenced by supply and demand, and demand hasn’t subsided for years. Governmental policy aimed to increase housing production, but there are concerns that still not enough is being done to support first-time buyers from the supply side.

Lacking financial knowledge and understanding

Another barrier that is becoming more apparent is the fundamental lack of knowledge and understanding surrounding buying a home, mortgages and lending criteria. Without proper targeted education, young adults are largely unaware of the implications that their life choices can have when they attempt to buy a property. For example, choosing self-employment or buying a car on finance can have serious impacts on your chances of gaining a mortgage. Not to mention credit scores and credit history are something that not everyone keeps an eye on, but these are essential when applying for a mortgage.