New research from Aldermore suggests that some 55 per cent of prospective first time buyers are currently seeking to raise a larger deposit than initially intended due to recent changes in the property market.

And 49 per cent of prospective first time buyers are planning to buy a house of lower value than they initially planned, due to the likelihood of higher monthly repayments.

Aldermore’s latest First Time Buyer Index, a survey of 2,000 prospective first time buyers, reveals the impact of the ongoing volatility in the property market on prospective buyers’ plans. As homebuying costs have soared, half of all aspiring FTBs are currently seeking to raise a larger deposit than they initially intended.

On average, prospective buyers in the UK are planning to raise £47,067 for a deposit.  Despite this, nearly three out of four potential buyers recognise the long-term value of home ownership, and believe owning a home is a great investment for the future.

In addition to raising a larger deposit, nearly half are planning to buy a house of lower value than they initially thought, as higher interest rates have increased average monthly repayments, making home ownership less affordable. On average, prospective buyers would at most consider spending 30 per cent of their monthly income after tax on their mortgage.

However, in light of rising home purchasing costs, half of prospective buyers are opting to put their homebuying plans on hold in the hope property prices drop further.

Regionally, the most expensive cities for first time buyers to raise a deposit are London and Oxford, with buyers having to put forward £145,272 and £132,101 respectively. Meanwhile the cheapest city to raise a deposit is Sunderland (£21,117), marking a stark different from the capital, where buyers are putting down six times more for their deposit.

For the same price as an average deposit in London, buyers in Sunderland could purchase a property outright (average first time buyer selling price: £125,586) decorate and furnish it (national average: £14,410) and have £5,276 left over.

Jon Cooper, head of mortgages at Aldermore, says: “The property market has been a difficult environment to navigate following the considerable volatility we saw in late 2022. Homeownership is increasingly expensive, and first time buyers are having to raise larger deposits and lower their budgets accordingly. While this may be disheartening, first time buyers can still find their way onto the property ladder.

“It’s important now more so than ever, that prospective buyers speak to a broker. No matter where they are in their homebuying journey – whether they’re still saving for a deposit or ready to begin their property search – a broker will be able to guide them through the process, identify what they can realistically afford, and how much the whole homebuying process will cost. This will help give first time buyers a clear and actionable path to homeownership amid these uncertain conditions.”

Ironically the research comes just as the government is considering allowing renters to buy their first homes with just one per cent deposits, according to The Independent online newspaper.

It claims that the government is considering the scheme as a radical variation of the previous Help to Buy scheme, which saw some buyers able to purchase new build houses with only five per cent deposits.

Banks and building societies would have their mortgages – possibly up to 99 per cent of the property value – guaranteed by the government, according to reports.

However there remains scant detail about the idea, with no reference as to how this would help first time buyers pass payment affordability tests, even if they could afford the drastically reduced deposits required.