Almost half of aspiring first-time buyers are using secondary income streams to help fund a deposit, according to new research from Santander UK.
The lender said 49% of would-be buyers are taking on what it describes as “home hustles” as they try to overcome affordability pressures and move closer to buying their first property.
Santander’s findings underline the extent of the challenge facing first-time buyers, with seven in 10 saying home ownership is difficult for young people today and 77% believing previous generations had an easier time saving for a home.
The biggest obstacles cited were the cost of housing, named by 78%, the rising cost of living, identified by 75%, and high deposit requirements, highlighted by 59%.
More than a quarter, 28%, said they could not rely on financial support from family to help them purchase a first home.
Despite this, demand remains strong. Santander said 72% of prospective first-time buyers still see home ownership as a priority.
The research suggests many are looking beyond their main job to close the savings gap. Among those taking on extra work, the average income generated was £442.62 a month, in return for around seven hours a week. More than one in 10, 12%, said they earned more than £1,000 a month, while 64% said they save most or all of that extra income towards a deposit.
The most common side incomes included paid surveys, gardening, selling personalised items, home baking and dog walking.
Santander also found aspiring buyers are using other methods to build savings. Around 24% said they would put away the whole of any bonus or pay rise, while 23% said they had used savings challenges. A further 23% said they had sold childhood collectibles, including Beanie Babies or Pokémon cards, to support their deposit fund.
MISCONCEPTIONS REMAIN
The lender said there are also persistent misunderstandings about what is needed to buy a first home.
Its data found 19% of first-time buyers believe they need a minimum of £50,000 to buy, while 17% think the maximum loan-to-value available to them is 95%. Santander added that 26% believe their affordability has worsened over the past 12 months.
The figures point to a potential role for advisers in helping borrowers understand what products and borrowing options may be available.
Santander said its My First Mortgage proposition offers up to 98% loan-to-value with a minimum £10,000 deposit. It also said its own data shows the average aspiring buyer currently has around £9,000 in savings.
David Morris, director of mortgages at Santander UK, said: “Home hustling is just one-way would-be buyers are boosting their income streams, expediating the time it takes to save for a deposit, stamp duty and legal costs as they take back control of their homeownership journey.
“But it’s clear that many common misconceptions still exist. This is where mortgage brokers provide invaluable support for first-time buyers, helping them to see behind the interest rates and headlines, and understand what options are available to them.”
