Property ladder expectations low for aspiring homeowners

But Santander now offer 95% mortgages on new-build homes

Less than half (48%) of aspiring first-time buyers expect their homeownership dream to become a reality, according to a survey.

Nearly three-quarters (73%) of people who want to get onto the property ladder said their parents own their own home, the research for property advice website the Homeowners Alliance found.

Seven in 10 (71%) people surveyed who are not homeowners said they want to get onto the property ladder, despite 52% of them believing they will never be able to achieve this.

The top barriers include high house prices (60%), saving for a deposit (44%), the ability to afford monthly mortgage repayments(33%)andtheability to get approved for a mortgage (31%), the survey found.

Paula Higgins, chief executive of the Homeowners Alliance said: “Brits are giving up on their dream of homeownership, our damning survey reveals.”

She added: “With the upcoming election, a key issue will be how the parties plan to build more homes and provide much-needed support to firsttime buyers.”

Opinium surveyed 2,000 people across the UK in January 2024.

A Department for Levelling Up, Housing and Communities spokesperson said:“supportingyoungpeople to own their own homes is a priority, and since 2010 we have helped over 860,000 households purchase a home through Government-backed schemes and have delivered 2.5 million homes.

“Through our longterm plan for housing we remain on track to meet our manifesto commitment to build one million homes this Parliament, backed by £10 billion investment, including an additional £11.5 billion in the affordable homes programme, and just last week announced a renewed focus on brownfield land to deliver more of the homes this country needs.”

However, there was better news for homeownership hopefuls as Santander announced 5% deposit mortgages on new-build homes.

Previously, the lender required at least a 15% deposit for new-build houses and 20% for new-build flats.

The new lower 5% deposit requirement will apply to both new-build houses and flats.

Customers buying a newbuild home with a 5% deposit will be able to select from the bank’s current range of fiveyear fixed-rate products.

Graham Sellar, head of development, mortgages said: “We know that saving for a deposit is one of the biggest hurdles for aspiring homeowners, especially for those juggling rental payments against trying to save.”

David O’leary, executive director at the Home Builders Federation said: “Santander’s introduction of 95% mortgages for new-build homes is extremely welcome.

“Most of us recognise that there is a shortage of homes and it’s becoming harder for younger households to step into homeownership.”

Santander was one of several lenders to recently raise some mortgage rates, citing wider market conditions, including swap rates, which lenders use to price their loans, as an issue.

HSBC UK increased some of its mortgage rates across its homeowner and buy-to-let range.

According to financial information website Moneyfacts, the average twoyear fixed residential mortgage rate on the market increased to 5.74%, up from its previous average rate of 5.72%.

And the average five-year fixed residential mortgage rate also nudged upwards, increasing to 5.31%from an average rate of 5.30%.