Home Buying Survey | NatWest

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The Home Buying Survey

Is the nation discouraged from getting on the property ladder?

Looking for a mortgage?

We know lots of people feel like it’s getting more and more difficult to buy their first home. But could a gloomy attitude be stopping some people from trying to get on the property ladder?

We’ve run the Home Buying Survey* to find out. It’s revealed that a lack of positivity towards the UK housing market held by some people, could be affecting their chances of buying a property – 36% of people who don’t own a property don’t think they’ll be able to buy a home.

The results

Getting on the property ladder

Financial difficulty, the stress of the moving process, and finding a suitable property are some of the biggest barriers to buying a new home.

 

Over a third (36%) of people who don't own a property, don't think they will be able to buy a house
Nearly half (48%) of potential first time buyers cite financial reason (saving a deposit, deciding on a mortgage deal and securing a mortgage) as the biggest barrier to buying a home

The home-buying process

Over-budgeting and lack of knowledge is putting people off attempting to buy a property. When buying a home, people tend to overestimate the additional costs they'll need to cover. 

 

54% of those looking to buy, overestimated the cost of stamp duty

69% of people wouldn't feel comfortable explaining what stamp duty is
77% of people were unable to give the correct rate of stamp duty/LBTT on a property worth £120,000

Find out more about the UK’s knowledge gaps, and how we may be over-budgeting for these additional costs below:

Read our A-Z of buying a home

A closer look at ‘generation rent’

People who don’t own a home are less optimistic about the housing market.

 

40% of 20-24 year olds who don't own a property, don't think they'll be able to buy one - this feeling decreases with age
40% of first time buyers think that the amount of people buying a home will decrease in the next 10 years - this is 11% higher than the 29% of home owners that feel the same

The future of the housing market

People aren’t positive about the future of the property market.

 

82% of people think Brexit won't have a positive impact on the ability to buy a house

This is particularly true in Northern Ireland, where over half (57%) of people think Brexit will make it harder to buy a house.

 

Only 26% of people think the UK will have more home owners in 10 years' time, than now

* We asked 2,025 UK residents aged between 20-45 years old about their experience and knowledge of the house buying process - December '16

Costs of the home buying process

Our home buying survey showed us that some first time buyers plan to budget more than they need to for the additional costs that come with buying a home.

We spoke to Paula Higgins, a property expert and the Chief Executive of HomeOwers Alliance, to find out just how much people may be overestimating. Take a look at the table below to see how much people are budgeting vs. Paula's suggested average costs:

What additional costs are first time buyers overestimating?

Additional costs How much do people plan to budget on average? [1] What are the actual average costs? [2] What do they overestimate the most?
Valuation fee £1,446 £250 ↑ £1,196
Mortgage indemnity fee £1,932 £0 ↑ £1,932
Stamp duty £3,300 £1,840 [3] ↑ £1,460
Mortgage arrangement fee £1,815 £995 ↑ £820
Mortgage broker fee £433 £0 [4] ↑ £433
Conveyancing £1,557 £1,150 ↑ £407
Survey fee £458 £300 ↑ £158
Total £10,941 £4,535 ↑ £6,406

[1] Average amount those looking to buy a property plan to budget. Figures taken from NatWest's Home Buying Survey. Online survey of 2,025 UK adults aged 20-45, November 2016

[2] Actual average costs are estimates provided by HomeOwners Alliance. Based on average UK house price taken from October 2016 Land Registry data (£217,000). Costs can vary on a case-by-case basis.

[3] To purchase the average UK house priced at £217,000 you'll pay £1,840 in stamp duty (based on stamp duty rates in England, Wales and Northern Ireland)

[4] HOA revealed that there are fee-free mortgage brokers available

 

 

On average, we expect to pay 59% more (£6,406) for the additional home buying costs listed above

Buying a home can be a pricey process, but it might not be as much as you first think.  

 

You should get accurate estimates based on your individual situation – such as property type and location, to give you a better idea on what to budget for.

 

Paula advises:

 

Research is critical to understanding what you can and can’t afford when it comes to getting on the property ladder… as well as the marketed price of the property, work through the costs that come with the process of buying a home.

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