A report from Moneybox, which is entitled ‘Voice of FTBs’, Understanding the UK’s FTB community, found that of 4,000 respondents, two-fifths of women who were first-time buyers had to cut back to save for their deposit, compared to a third of men.
Additionally, 30% of women said they delayed having children so they could buy a home first, while less than a quarter – 24% – of men did the same.
Moneybox’s research also suggested that women found the home buying process more stressful than men did, with 32% saying it had a negative impact on their mental health compared to 18% of men.
The research revealed there was a £7,400 deposit savings gap between millennial men and women.
Moneybox said not only were women affected by a gender pay gap, but its study showed there was also a “significant gender deposit gap”.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
The firm said: “Not only is this another example of how women’s financial opportunity in life is disproportionately worse, but the pay gap is causing a ripple effect impacting every element of women’s lives.”
Single buyer ‘penalty’
The report also suggested there was a “penalty” for single first-time buyers, which was notable as more people stayed single later in life.
Moneybox said solo buyers were “facing a much steeper hill to climb” compared to those buying with a partner. It also said single first-time buyers needed more support to prepare them for the home buying journey to make sure they were not “financially marginalised”.
According to the research, solo first-time buyers save £3,000 less than their coupled counterparts, with an average deposit of £44,000.
It also took a tenth of single first-time buyers 10 years to save a deposit and 39% said this took “much longer” than expected.
The process was found to be stressful, too, with a third saying buying a home was “overwhelming”.
Better outcomes with financial help
Moneybox also assessed the impact of financial support on first-time buyers and found those who were given a gift or loan from loved ones were able to get onto the property ladder twice as quickly.
Additionally, it enabled them to prioritise saving towards future financial goals sooner compared to first-time buyers with no financial help.
According to the study, 71% of recent first-time buyers had financial support and 46% of aspiring homeowners hoped to get help to buy their home within the next year.
People with higher earnings received an average of £35,000 more in financial assistance, while a quarter who were given support were now able to focus on longer-term savings.
Pressure on first-time buyer millennials
Moneybox said the millennial generation was facing “unique challenges” when it came to owning a home, as they felt the most societal pressure and therefore placed more importance on homeownership than people from other generations.
They were also found to worry more about missing out and delaying life events such as starting a family or saving for retirement in order to buy a home.
Some 80% of millennials suggested the Government should do more to help them get onto the property ladder compared to 70% of Gen X.
Moneybox found that 61% of millennial respondents felt older than most people who were buying their first home compared to 37% of Gen Zs, while 59% of millennials worried they started saving too late.
Some 30% of people in the millennial generation delayed having a family to achieve their homeownership goal, while 67% believed they would be paying their mortgage off in retirement.
Risk of ‘deepening economic divides’
Moneybox said the challenges for first-time buyers needed to be addressed or there would be a risk of “deepening economic divides and could undercut the very foundation of wealth creation in our society”.
Brian Byrnes, head of personal finance at Moneybox, said: “First-time buyers are often referred to as one homogenous group. Yet, in reality, their paths to homeownership are far from uniform. Income, location, gender, family status, and access to financial help, like the ‘Bank of Mum and Dad’, all shape first-time buyers’ unique experiences, and by generalising their experience, we risk oversimplifying the challenges they face. We believe that understanding the diverse needs of first-time buyers is key to offering meaningful support and helping them get onto the property ladder.
“Our research uncovered a growing number of challenges that if left unaddressed could undercut the foundation of wealth creation in our society, and further deepen economic divides. For decades, homeownership has been viewed as a cornerstone of financial stability and one of the most effective ways to accumulate wealth. Enabling first-time buyers is not just about helping young people buy a home; it is about nurturing the future wealth creators of our society.”
He added: “With a new Labour Government now in place, we have the opportunity to collectively consider how we can create short-, medium- and long-term solutions that meet the diverse needs of the first-time buyer community.
“Based on our research and discussions with first-time buyers, we are calling for four tangible actions from the Government. Firstly, the creation of a Government working group to address the challenges identified from listening to the voices of first-time buyers. Secondly, a commitment to considering not just the long-term solutions like building more houses, but also practicable solutions for the short and medium term. Thirdly, we ask for ministers to commit to regularly meeting with first-time buyers and connecting with those voices that need to be heard on this topic. And finally, we are calling for the Government to commit to future-proofing the LISA in order to help first-time buyers save for that all-important deposit.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Women more likely to alter life plans to get on property ladder, report finds
