The needs of first-time buyers (FTBs) in the UK have been sidelined for far too long, and the consequences are becoming stark. Moneybox's research uncovers a growing number of challenges that, if left unaddressed, risk deepening economic divides and could undercut the very foundation of wealth creation in our society.
With the government’s pledge to "recapture the dream of homeownership" and foster nationwide prosperity, FTBs must have a voice and an opportunity to contribute to and influence government strategy.
Moneybox's findings make it clear; there are several factors that disproportionately affect many aspiring homeowners' ability to realise their dream of home ownership and, importantly, their opportunity to build wealth for their future. Moneybox is proud to support the largest community of aspiring homeowners in the UK, and wants to ensure that the lived experiences of FTBs are understood by those who are responsible for shaping policy and product design.
Through its extensive research and dialogue with both aspiring and recently successful FTBs, Moneybox has captured their views on the measures that could provide real, lasting benefits. Drawing on market expertise and customer insight, in this report Moneybox also hopes to shine a spotlight on the areas where immediate attention is needed.
Homeownership has been a reliable path to financial security for generations so let's together drive the conversation towards meaningful solutions that will ensure aspiring FTBs have access to that same opportunity, so we can foster a more prosperous future for all.
FTB Challenges:
Millennials in the Middle: The Millennial Generation is facing a number of unique challenges to getting their first foot on the property ladder. They most keenly feel societal pressure to own a home and so place the highest importance on achieving this key financial goal compared to other generations. They are also more likely to worry that they’re missing out, with many having delayed key life events, including having a family and saving for retirement in order to prioritise buying a home. To help redress this, millennials would welcome greater government support, with 80% calling on the new administration to do more to help their plight, compared to 70% of Gen X.
Key findings:
- 61% feel older than most other people buying their first home versus 37% of Gen Zs
- 59% worry they started saving too late
- 30% have delayed having a family
- 67% worry they will be paying off their mortgage into retirement
Impact of Financial Support:
Without mitigating action, our society risks becoming increasingly polarised between those who benefit from financial support to buy their first home and those who do not.
Our research shows that FTBs that benefit from financial support, whether a loan or a gift, are able to buy twice as quickly as those who do not have this advantage. They are also able to prioritise saving towards future financial goals earlier in life than those who have to go it alone. Consideration must be given to measures that can enable everyone to have the opportunity to achieve their home ownership goal and realise their financial potential in life.
Key findings:
- 71% of recently successful FTBs bought their home with financial support
-46% of aspiring FTBs who hope to receive financial support intend to buy their home within the year, those without support think it could take twice as long
-High earners will receive £35K more from family than lower earners (on average)
-A quarter who had financial support are now focused on longer-term savings
The Single Penalty:
With increasing numbers of the UK population choosing to remain single into later life, solo buyers are facing a much steeper hill to climb in order to buy their first home than those buying with a partner. It is clear that solo buyers are in need of greater support to help them prepare for and navigate the homebuying journey and to ensure they are not financially marginalised.
Key findings:
-Solo FTBs aim to save just £3K less for their first home deposit than those buying with others (£44k Vs £48k)
- 1 in 10 solo buyers took 10 years to save the deposit for first home
- 39% of solo buyers said it will take much longer to buy than expected
- Solo buyers are 33% more likely to describe the home buying process as ‘overwhelming.’
The Gender Deposit Gap:
While women have been affected by a gender pay gap for centuries, our research shows that the gender disparity among FTBs also includes a significant gender deposit gap. Not only is this another example of how women's financial opportunity in life is disproportionately worse, but the pay gap is causing a ripple effect impacting every element of women’s lives. Our data shows just how much women are having to alter their life plans in order to meet their goals of buying a home of their own and the measures they would most value to support them on their journey.
Key findings:
- Millennial women face a £7.4K deposit savings gap
- 44% of women have had to cut back on saving for their deposit Vs 33% of men
- 30% of women have said they have delayed having children to prioritise buying a home Vs 24% of men
- 32% of women said the stress of home-buying had a negative impact on their mental health Vs 18% of men
Brian Byrnes, Head of Personal Finance at Moneybox comments: “First-time buyers (FTBs) are often referred to as one homogenous group. Yet in reality their paths to home-ownership are far from uniform. Income, location, gender, family status, and access to financial help, like the ‘Bank of Mum and Dad,’ all shape FTBs’ unique experiences, and by generalising their experience we risk oversimplifying the challenges they face. We believe that understanding the diverse needs of FTBs is key to offering meaningful support and helping them get onto the property ladder.
“Our research uncovered a growing number of challenges, that if left unaddressed could undercut the foundation of wealth creation in our society, and further deepen economic divides. For decades, homeownership has been viewed as a cornerstone of financial stability and one of the most effective ways to accumulate wealth. Enabling first-time buyers is not just about helping young people buy a home; it is about nurturing the future wealth creators of our society.
“With a new Labour government now in place, we have the opportunity to collectively consider how we can create short, medium and long-term solutions that meet the diverse needs of the FTB community.
“Based on our research and discussions with FTBs, we are calling for four tangible actions from the government. Firstly, the creation of a government working group to address the challenges identified from listening to the voices of FTBs. Secondly, a commitment to considering not just the long-term solutions like building more houses, but also practicable solutions for the short and medium term. Thirdly, we ask for Ministers to commit to regularly meeting with FTBs and connecting with those voices that need to be heard on this topic. And finally, we are calling for the Government to commit to future proofing the LISA in order to help FTBs save for that all-important deposit.”
