First Time Homebuyers Checklist
The way we move
Home is where the heart is, but when it comes to buying a property, home is often where the headache is! From hidden costs to mortgage jargon, how confident are Brits when it comes to navigating the home buying process?
We polled 2,000 UK homeowners to help shed light on the nation’s homebuying habits.
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What we discovered:
No place like home
For millions of Brits, having a place to call our own – and a front door we can paint our favourite colour – has long been an aspiration. In fact, almost three-quarters (71%) of non-homeowners aspire to own their home in the future, according to the HomeOwners Alliance.
But when you scratch beneath the brickwork, how does the homebuying dream compare with the reality?
Even when relationships turn sour, homeownership is the biggest heartbreaker. Younger millennials (25-34 year-olds) were the most likely to say that moving home is the biggest stress (43%) relative to romantic breakups (22%).
And in terms of gender, geography and different generations, it seems we experience these stressors differently.
- Women find moving house more stressful than men (53% vs. 44%).
- People in the South East (51%) and South West (54%) reported the highest stress levels from moving home. Among cities, Plymouth (56%) and Sheffield (53%) stood out.
- Gen X (45-54 years old) reported the highest stress related to moving (52%) and buying (40%) a house. In comparison, younger respondents (18-24) were most stressed by job interviews (40%).
Moving mountains
Upping sticks is no walk in the park, but what’s behind the stress?
In our survey, the wait to exchange contracts was the number one (31%) most difficult aspect of home buying. However, this was less of a concern for younger millennials (19%), who were more likely to reference ‘working out borrowing and upfront funds’ (21%) as a challenge.
And overall, the biggest source of dread for home buyers was ‘not having enough money for unexpected costs’ (34%).
So what financial factors should future homebuyers consider?
Looking in closer detail, our survey found that older homebuyers were much more prepared for the cost of moving house. In fact, 45% of people aged 55+ said they were aware of all moving costs – just 12% of young millennials (25-34) and 14% of Gen Z (18-24) said the same. Younger respondents were also most likely to underestimate utilities (40% of young millennials).
The cost of moving
- On average, people spent £1,836.49 on unexpected moving costs.
- Homeowners in London reported the highest average spend (£2,041), followed by Belfast (£2,033).
- Those in larger households (five people) reported the highest average spend (£2,121) for unforeseen expenses.
Making sense of mortgages
Money makes the world go round, but equally, learning about mortgages can make us go round and round in circles.
Our survey found that younger generations have a bigger mortgage knowledge gap. 39% of 25-34 year olds struggled with equity-related terms, while 38% were confused by the concept of an ‘Agreement in Principle’. In contrast, 39% of respondents aged 55+ said they understand everything clearly.
Across the UK, Londoners struggled the most with mortgage-related concepts, especially with fees (38%), equity terms (36%) and mortgage types (35%). Meanwhile, men were marginally more likely (17% versus 15.5%) to say they didn’t find any mortgage terms or concepts difficult to understand.
Knowledge unlocks doors
Based on our survey, our house buying habits change over time. In our younger years, we appear to lean more on family – cited by 42% of Gen Z versus 28% of Baby Boomers (aged 55 and above). Later in life, the use of a mortgage advisor peaks among older millennials – 52% of 35-44 year olds.
Regionally, people were mostly likely to use a mortgage advisor in Scotland (47%), while reliance on family was highest in Yorkshire and The Humber (38%). Women were more likely to use a mortgage advisor than men (44% versus 39%).
The confidence factor
When the dust settles and homebuyers reflect on their first-time property purchase, how confident did they feel?
- 63% of respondents (net) said they felt confident about their financial planning when buying their first home.
- A fifth (20%) said they were ‘very confident’.
- 9% said they were ‘not confident’, and just 2% said they were ‘not confident at all’.
Overall, confidence was highest among younger millennials – 71% (net) of 25–34 year olds – and lowest in the 45-54 or Gen X age group (53% net). Regionally, confidence was highest in the East Midlands (69%) and lowest in Northern Ireland (56%).
Protect your home, and your future
Once we finally get the keys, it’s time to raise a glass, and breathe a sigh of relief. But suddenly, our priority isn’t just about purchasing – but protecting – our bricks and mortar.
We asked respondents what type of financial protection they took out when buying their property. Building insurance was top (67%) followed by contents insurance (61%) and life insurance (38%).
It’s easy to get muddled about mortgages, but help is at hand. For more inspiration, check out A Little Bit Richer with Iona Bain and L&G. It’s a podcast designed to help listeners get on top of their finances, and includes Your Ultimate Guide to Buying a Home.
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Take a look at our guides below to find out more about life insurance and find out how much cover you might need with our life insurance calculator.
