Why is it so hard to buy right now?

Reason #1: Deposits

The biggest barrier for most people when buying a home is the dreaded deposit. With banks such as Nationwide saying a 10% deposit is now more than 50% of a typical first time buyer’s income, it can seem impossible to save alongside rising bills and paying rent (which has increased to an average of £1,078 per month).

We can’t fix the problem of saving for a deposit, but there are options out there to help. Schemes such as Help to Buy or Shared Ownership are set up tp help you get on the property ladder with a low deposit. There’s also things like Joint Borrower Sole Proprietor mortgages where a member of your family can help you out. 

It’s always worth speaking to an expert to find out your options. They can suggest more specialist ways of buying that you might not have thought about. 

Reason #2: Interest rates and cost of living

Because of climbing inflation and increasing interest rates, borrowing has become more expensive. This can then increase your monthly spending on things like credit card debt, and has a knock-on effect when it comes to working out your mortgage affordability - the less money you have available, the less you’ll typically be able to borrow. From food to fuel, your outgoings are likely to be much higher now than they were pre-pandemic, and may be making it harder to purchase a home. 

This doesn’t mean it’s impossible though. It’s always worth getting advice from a mortgage broker who can match you with a lender to get you the most competitive mortgage deals. Read more about interest rate rises in our Rising Anxiety blog.

Reason #3: Record low supply of available properties

Speak to anyone who’s tried to purchase a home recently - they’ll tell you that you have to move fast. Research from OnTheMarket shows that 61% of properties being advertised for sale are sold subject to contract within 30 days. To find a desirable property, or one that’s affordable for a first-time buyer, can be a race, and not always a fair one. With reports of buyers being ‘gazumped’ and having viewing cancelled at the last minute, it’s very much a seller’s market. With much more demand than supply, offers are often exceeding asking prices. 

You’ll be able to act quicker if you’re mortgage ready. Getting all your paperwork ready and having a Decision in Principle will mean you’re as prepared as possible. 

Is it going to get easier?

The housing market is very uncertain so it’s hard to make predictions. However, experts are saying that the sky-high house prices we’re seeing at the moment are unsustainable. The supply of houses is likely to go up due to market uncertainty or over-stretched budgets, so we could see the low supply issue getting easier. 

There’s some hope potentially on the horizon. The UK government is currently weighing up plans to make low-deposit mortgages available to borrowers who take out an insurance policy when they buy their home. 

Inspired by a similar scheme in Canada, the move would see buyers take out a type of ‘mortgage guarantee insurance’ that would protect the mortgage provider if the homeowner falls behind on repayments. This insurance would act as a bit of a safety net, meaning lenders wouldn’t need to offset as much risk by asking for big deposits.

No decisions have yet been made on this scheme, so it’s not likely to be introduced for a while. But there’s still low-deposit options available such as Shared Ownership. Willing family members could also help you get on the property ladder through specialist options such as Guarantor or JBSP mortgages. 

Read more in our Guide: How can my family help me get a mortgage?

How we can help

We can’t fix the problem. But we can give you advice if you’re feeling stuck. We’re experts in mortgages for bad credit, self-employed, and the tricky stuff. Difficult is what we do. So if you’re trying to buy a house and feeling overwhelmed, or just want to know your options, let’s chat.