Buying a first home is a big achievement, but it is also becoming increasingly challenging. Rising mortgage rates, higher living costs, and limited housing options make it tough for first-time buyers to get onto the property ladder. Let’s look at some of the main challenges they face today.
Rising mortgage rates
Mortgage rates have been climbing in recent years, which makes borrowing more expensive. Higher rates mean monthly mortgage payments are bigger, reducing how much buyers can afford to borrow. For first-time buyers who often have limited savings, this can make it harder to find a home within their budget.
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High cost of living
With the cost of living rising, many people have less money to save for a downpayment. Expenses for things such as rent, utilities, food, and transport have increased, leaving less room in monthly budgets to save up. This can delay home ownership for years, as potential buyers struggle to set aside enough for the necessary upfront costs.
Saving for a deposit
Saving for a deposit is one of the biggest hurdles for first-time buyers. Many lenders require a deposit of around 10-20% of the home’s value and for those who don’t have family help, it can take years to save up this amount while managing other expenses.
Tighter lending requirements
Banks and mortgage lenders have started implementing stricter lending requirements. First-time buyers must often meet strict criteria, such as having a steady income, good credit, and a large deposit. For some, meeting these requirements can be difficult and may result in a declined application.
Managing additional costs
On top of the mortgage, buying a home comes with many extra costs such as solicitor fees, inspections, and moving expenses. Many first-time buyers struggle to afford these extra costs.
