More than half of young Scottish adults say the rising cost of living is having the biggest impact on their ability to buy a home, new research reveals.
Pepper Money’s Scotland Specialist Lending Study finds 54% of 18 to 34-year-olds identify living costs as the biggest factor affecting their homeownership ambitions.
Across Scottish adults more broadly, 39% say their plans to own a home have been affected by affordability pressures, rising household costs and difficulties saving.
The findings emerge as governments on both sides of the border introduce measures designed to help more first-time buyers onto the property ladder.
SAVINGS PRESSURE
Pepper’s research finds a third of Scottish non-homeowners with complex incomes have no savings or investments, compared with 29% of non-homeowners overall.
A further 20% of non-homeowners with complex incomes say they do not have enough savings for a deposit.
Among Scottish non-homeowners with adverse credit, 55% identify the cost of living as having the greatest impact on them.
Despite those pressures, the research finds 5% of Scottish adults with complex incomes intend to buy a home to live in during the next year, rising to 11% among self-employed Scottish adults.
FIRST-TIME BUYER SUPPORT
The research follows the launch of Scotland’s First Homes Fund, which provides eligible first-time buyers with up to £10,000 towards purchasing a property worth up to £300,000.
It also comes as the UK Government prepares to introduce Your First Home in England, under which eligible first-time buyers will be able to purchase new-build homes with deposits expected to start at 2.5%, supported by a government-backed equity loan worth 20% of the property price.
Although the schemes operate differently, both are intended to reduce barriers facing aspiring homeowners.
COMPLEX INCOMES
Paul Adams (main picture, inset), Director of Sales at Pepper Money, says: “For younger people in particular, the pressure is stark. Our research shows more than half of 18 to 34 year olds say the cost of living is having the biggest impact on their homeownership plans.
“For many aspiring homeowners more broadly, the immediate challenge is building a deposit while everyday costs continue to squeeze household budgets, with 20% saying they do not have enough saved for one.
“Savings challenges can quickly become homeownership challenges, especially for customers with complex income or adverse credit, whose circumstances may not fit neatly into standard lending criteria.
“That is where specialist lending and broker expertise can make a real difference, helping customers be assessed on the substance of their circumstances and supporting those who may need a more flexible route to homeownership.”
