First-time buyers moving further to get on the property ladder – research

Affordability concerns are prompting many first-time buyers to consider moving more than 30 miles on average from their preferred location to get their foot on the property ladder, research suggests.

A study of 1,000 aspiring homeowners from saving and investing app Moneybox found 39% are actively looking at properties in neighbouring areas beyond where they currently live to improve their chances of securing a property which meets all their needs. 

Those surveyed were most willing to compromise on location in order to afford a garden (66%), a spare bedroom (53%), an ensuite bathroom (48%), a driveway (47%) or a garage (44%). 

The study also revealed financial reasons were not the only things motivating potential homebuyers to look further away, with some looking for more peaceful or serene surroundings (38%), or safer neighbourhoods with lower crime rates (32%).

Aspiring first-time buyers in Wales are looking furthest afield, considering properties an average of 38 miles away. While hopeful buyers in London and the South East are prepared to move up to 33 and 37 miles respectively.

Despite affordability challenges, homeownership remains an important goal for the majority of first-time buyers in the UK (79%), with 62% viewing it as a key to unlocking financial security, up 6% from last year.

Brian Byrnes, head of personal finance at saving and investing app Moneybox, said:  “Market volatility over the past few years has really highlighted how compromise is often the key to getting on the property ladder as a first-time buyer. It's great to see how first-time buyers have been adapting to make their dream of owning a home a reality and we see this resilience and commitment every day among our customers. 

“However, we also believe that more could be done to help first-time buyers navigate current market conditions with greater confidence. Interest rates and house price growth now mean that more people will struggle with affordability and so it’s never been more important to save a suitable deposit.”

The study also found 35% of those surveyed feel optimistic about becoming homeowners and 22% have even managed to save more than expected towards their deposit in the last six months.

Yet, the cost of living continues to impact disposable income for the majority (57%) making it harder for many to save for a deposit alongside rising house prices (51%).

According to the research, first-time buyers are now saving 18% less towards their first home deposit than a year ago, down from £344 to £286 a month.

17% are also eagerly awaiting the General Election to see what support may be provided to aspiring first-time buyers by a new government.

Byrnes added: “As we enter the final weeks before the General Election, it is clear that more needs to be done to address housing supply and sustainably boost homeownership - without further inflating house prices. However, many of the solutions needed are complex and will take some time to bear fruit. 

“That is why we’ve been campaigning to future-proof the Lifetime ISA, a hidden gem of a savings product that has supported a whole generation of first-time buyers, buying their first home far sooner than would have otherwise been possible due to the fantastic 25% government bonus on deposit savings.

“We believe first-time buyers deserve all the help they can get and so we are calling on the next government to futureproof the Lifetime ISA and help more people save more money towards their first home deposit.”