New research from Aldermore’s First Time Buyer Index reveals that more than a third of prospective FTBs (35%) need an average annual salary of increase of £21,646 to realise their property aspirations.
With mortgage rates and house prices continuing to squeeze affordability, nearly two thirds (64%) are putting aside more than they initially expected. Prospective buyers now expect to save £48,168 for a deposit.
FTBs changing careers and negotiating pay rises
FTBs are taking proactive measures to achieve their dream and boost their financial position:
- 40% are looking for higher-paying jobs
- 22% have negotiated a pay rise
- 21% switched or are considering switching careers
- 20% moved jobs for bigger bonuses
- 17% delayed leaving a job to strengthen their mortgage application
- 13% have gone into or considered a career they don’t like to buy a house
And yet, even with bigger deposits, expectations around monthly costs remain mismatched with reality. Prospective FTBs say the maximum they’re willing to allocate to mortgage payments is 27% of their income but current homeowners know that’s far from typical. After tax FTBs with a mortgage spent an average of almost 31% of their salary on their mortgage. This rises to 41% for buyers aged 18–24, and 37% for those living near London.
The road to homeownership is longer than ever before
This gap between expectations and reality is pushing homeownership further out of reach. Today’s aspiring buyers don’t expect to get the keys until age 37, six years later than recent first time buyers, who purchased aged 31 on average.
Half of all first time buyers will spend five or more years saving (45%); one in 20 will take more than a decade (5%).
Jon Cooper, director of mortgages at Aldermore, said: “The UK’s first time buyers aren’t just tightening their belts, they’re rethinking their entire career paths to try and get on the ladder. From chasing pay rises to moving into different roles, prospective homebuyers are reshaping their working lives to secure a home of their own. Their ambition is as strong as ever, but the sacrifices they’re making are more significant.
“For anyone considering a career change to boost their income, it’s important to take a measured approach, looking at long term earning potential, retraining options and if a new role genuinely aligns with your skills. Before making a major move, talk to your current employer about progression, responsibilities and a pay rise that could unlock opportunities without the upheaval of starting again.”
