FTB index – stamp duty holiday benefits and deposit saving woes

The UK housing market has boomed over the past year, with buyers and sellers benefitting from recent initiatives. But how have first-time buyers fared since 2020?

Regulated property buyers GoodMove surveyed first-time buyers and those who are looking to buy their first home to reveal how they got on the property ladder, if they’ve taken advantage of the stamp duty holiday and what they found the most complicated part of the process to be.

We outline the key findings below.

How first-time buyers have got on the property ladder

House prices and deposits are at an all-time high now, with first-time buyers now requiring up to 20% of a property’s value for a deposit.2 

The research found that most (53%) have saved for a house deposit by themselves, with a further 34% having help from their parents or other family members to secure a deposit.

Some 28% of people have received money for their deposit through inheritance, 11% have taken out a loan to help them buy a home and 10% have received help from government schemes. Meanwhile, a lucky 8% said they have won money in the past and this helped them secure a house deposit.

How the stamp duty Holiday has helped first-time buyers

GoodMove’s survey found that 39% of Brits have taken advantage of the stamp duty holiday, and a further 8% haven’t yet bought a home but are planning on using the extension to get on the property ladder.

When looking at age groups, it’s those aged 25-44 that are most likely to have taken advantage of the holiday (42%) in the past year.

Interestingly, 18–24-year-olds are most likely to say they either haven’t taken advantage of stamp duty when they bought their home (50%) and that they won’t take advantage of the holiday in the future (10%).

The most complicated part of the home buying process

Even with government initiatives such as the stamp duty holiday, the home buying process is still a difficult one. When asked what the most complicated part of the home buying process was, the top ten reasons were as follows:

• Saving for a deposit (33%)

• Finding a good mortgage deal (32%)

• Mortgage application process (28%)

• Understanding the terms (22%)

• Knowing where to start (22%)

• Fees (conveyancer, solicitor, taxes) 20%

• Finding the right home (19%)

• Getting an offer accepted (18%)

• Property surveys (13%)

• Home viewing process (13%)

Just 2% of respondents didn’t think any part of the process was difficult or complicated – showing just how hard and confusing it really can be.

Perhaps unsurprisingly, saving for a deposit has been named the most difficult part of buying a home, with a third (33%) of people ranking it the trickiest part. Saving for a deposit is rarely easy and takes plenty of dedication and perseverance.

Home buyers were asked how long it took them to save for a deposit, with the majority (27%) saying it took them between two and five years to save up. Just 5% said it took them less than six months to raise the funds for a deposit. At the other end of the scale, 10% said it took them over ten years.

Commenting on the research, Nima Ghasri, director at GoodMove, says: “First-time buyers generally have the hardest time buying a home, with securing a deposit and mortgage approvals among the hardest part of getting on the property ladder.”

“In this campaign, we wanted to see exactly how first-time buyers and those looking to buy a home in the immediate future have bought their home and secured their deposit as well as what they found the hardest part to be.”