Yorkshire Building Society has recently published research which indicates that many first time buyers are planning inaccurately for the costs of buying their first home, and urges first-time buyers to think and budget carefully to improve their chances of becoming homeowners.
Only two regions in the UK were properly prepared - one of which is Scotland - but the rest fell short of the amount they would need to buy their first home by thousands of pounds.
London saw the biggest gap between expectation and reality, with potential homeowners failing to account for up to £70,000. First-time buyers in London paid an average of £415,000 with an average deposit of £118,531. But, the research from Yorkshire Building society indicated that potential buyers only budgeted for £49,000.
This can be compared to Yorkshire and The Humber, and Scotland where potential buyers were prepared to save more proportionately to become homeowners. In fact, they might even be overestimating how much they might need. First time buyers in Scotland paid an average of £137,2714 with a deposit of £24,000, but planned to save around £1500 more than the deposit amount.
Chris Irwin, senior mortgage manager at Yorkshire Building Society, said:
“I’d encourage anyone with a dream of homeownership to really take time upfront to do the maths and work out how much they will realistically need to take that first step on the property ladder, including any up-front fees on top of a deposit."
“When you’ve got a more realistic figure, it’s easier then to review your savings habits and work out what you’re able to save over what period of time, to achieve your required goal.”
“Breaking it down in this way, early on in the home-buying journey could really help first-time buyers.”
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