Over half (51%) of UK adults are hoping to buy their first home or move house in 2016 according to new research. Yet as we all know, it’s not as simple as just finding a property you like and making an offer.
The reality is far more complicated. Nearly two thirds (61%) of those wanting to buy this year think it’ll actually be pretty unlikely they’ll be able to do it in the next 12 months. In fact, the average wait is actually 3.2 years, says comparison site Gocompare.
The top barriers to buying and moving
The reasons why vary depending on the age group.
For those starting out, affording a deposit is the biggest barrier. A quarter of 18-24 year olds and 28% of 25-34 year olds feel the size of the upfront sum required will likely stop them buying.
For the next two groups, 35-44 years old and 45-54 years old, it’s high property prices which are the biggest worry, while the over 55s are struggling to find the type of property they want in the area they wish to live.
These may have been the most common reasons, but they weren’t the only ones.
The associated costs of buying a property such as stamp duty and fees were among the top three worries for 25-34 year olds, 35-44 year olds and the over 65s.
Prospective buyers aged between 45 and 64 were worried about their job and income security, while the youngest group, 18-24, felt the ongoing costs of running a home could stop them buying.
A poor credit history was also seen as a key barrier to moving by 45-54 year olds.
How to work out what you can afford
Of all the barriers to buying or moving, it was the high property prices which registered as the most common across all age groups. The value of the home of course has an effect on the monthly repayments required through a mortgage.
There are a couple of factors to consider.
The first is how much you can afford each month when compared to your other outgoings. When applying for a mortgage, the lender will look at your income alongside personal and living expenses in what’s called an affordability assessment.
Your finances will be stress tested to see what would happen if interest rates were to rise, or if you had a change in circumstances such as having a baby.
How to reduce your monthly repayments
A second factor that can affect what you’ll pay is the actual mortgage deal itself.
The larger deposit you have, the better access you’ll have to lower interest rates, which will reduce how much you pay back every month, though watch out for high fees.
If a deposit is also a barrier, there’s recently been an increase in mortgages for longer than the standard 25 years. This will reduce the monthly payment too, but has longer term costs and implications if there’s no flexibility within the mortgage.