The Brief: One in five prospective homebuyers in the country are willing to purchase a cheaper property in order to secure a purchase, according to Bloomberg Intelligence. The survey also found out that more than half are pursuing their plans of buying, while 13% admitted that they had it postponed or paused.
Why It Matters: According to Aldermore’s First Time Buyer Index, prospective buyers fund deposits using their own savings, while 23% rely on their family for financial help. For those who tap their parents for support, 58% rely on cash savings. The research also found out that it took an average of 5.1 years for these types of buyers to save for a deposit.
Finanze® Foresights: Bloomberg’s survey of buyers who are willing to settle for lower-priced properties, and Aldermore’s findings that 65% of prospective newbie buyers are amenable to buying outside their preferred area, both reflect this market segment’s eagerness to close a transaction. But their willingness to buy does not necessarily mean they can take advantage of lower house prices since the cost-of-living crisis, storage of home supply, and lower mortgage affordability still persist. And this has been reflected in home sales trends lately. Persimmon, the largest listed UK housebuilder, announced the other day that its average number of homes sold per week as well as its forward sales position have already declined. It blames rising interest rates and economic uncertainties that continue to impact lending and customer behaviour. So, for those who still need to keep up with rising mortgage rates by requiring a higher paycheck, the solution is to continue building one’s savings, but it may take longer than five years since real wages still fall behind inflation.
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