Cost of living hits homeownership plans for more than half of young Scots

More than half of younger adults in Scotland say cost-of-living pressures are the biggest obstacle to buying a home, according to research from Pepper Money.

The lender’s Scotland Specialist Lending Study found that 54% of 18 to 34-year-olds identified the rising cost of living as having the greatest impact on their homeownership plans.

Across Scottish adults as a whole, 39% said their plans had been affected by a combination of affordability pressures, higher household costs and difficulties saving.

The research comes as Pepper Money launches its first charge mortgage range in Scotland, extending its proposition to borrowers whose circumstances may require a more individual assessment.

SAVINGS PRESSURES

Among non-homeowners with adverse credit, 55% said the cost of living was having the greatest impact on their ability to buy.

Deposit building also remains a hurdle. Pepper Money found that 33% of Scottish non-homeowners with complex income had no savings or investments, compared with 29% of non-homeowners overall. A further 20% said they did not have sufficient savings for a deposit.

Despite those pressures, the research found continued demand among people whose income may not fit standard mortgage criteria. Some 5% of Scottish adults with complex income said they intended to buy a home to live in during the next year.

The proportion rose to 11% among self-employed Scottish adults, whose income patterns can require lenders to take a more detailed approach to affordability assessments.

Paul Adams, director of sales at Pepper Money, said: “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.”