There is a lack of understanding around the house buying process and the associated costs amongst those looking to buy their first home, research by Aldermore has shown.
Aldermore’s Q3 First-Time Buyer Index showed that the biggest expense when buying a home is saving for a deposit which affects 34% of first-time buyers.
The research also shows prospective buyers are falling short in their estimations of how much they need for their first deposit, with the average deposit needed being £49,639 according to the ONS.
Prospective first-time buyers are also underestimating the amount of time it will take to save a deposit, with 58% believing they will be able to reach this goal within five years, despite one in seven (16%) taking over eight years to save up the amount needed.
Charles McDowell, commercial director, mortgages at Aldermore, said: “It is clear there is a divergence between perception and reality when it comes to the house buying process.
“This often means those looking to buy are under-estimating the associated costs as well as the time it could take to complete, especially with first time buyers expecting it to take four years on average to save for a deposit.”
In terms of additional costs such as solicitor fees and stamp duty, 32% prospective first time buyers don’t know how much all of the costs equate to.
McDowell added: “Some have suggested that the government plans to announce cutting stamp duty for first time buyers, in the Autumn Budget, which is a step we would welcome.
“As it stands, first-time buyers are systematically let down by an overly complex, opaque and costly system.”