High mortgage rates and persistence inflation has prompted over half of prospective homebuyers to consider a “mortgage mate”, data from Mortgage Advice Bureau shows.
The broker network says 52% of prospective buyers say that once they have found a property they plan to buy, they would consider having a lodger to help supplement their outgoings.
Of this number, 17% say they definitely plan on having a lodger, and 21% say they’d consider having a lodger to specifically help cover the costs of household bills.
Away from taking on a lodger, it adds that 18% of would-be buyers say they will now need to buy with a partner, 9% with the help of a family member, and 7% are planning on buying with a friend.
Only 10% of prospective buyers believe they will be able to buy alone.
“There are also signs of increasing numbers of aspiring homeowners needing a mortgage guarantor,” the report says.
A fifth, or 20%, of early-stage buyers say they will need a guarantor, compared to 9% of buyers those who are more advanced in the process and nearer to completion.
The survey points out: “Economic uncertainty, fuelled by high inflation and interest rates pushing rents and mortgage rates up, is the biggest barrier standing in the way of homeownership according to two in five, or 42%, of homebuyers.”
Would-be homebuyers add that other major obstacles include, saving for a deposit, say 32%, a slowdown in the housing market, claim 27%, and being accepted for a mortgage, add 25%.
The survey comes after the Bank of England’s base rate rise by 25bps to 5.25% earlier this month, its 14th consecutive rise taking it to the highest level for 15 years.
The base rate rise has pushed core two- and five-years mortgage rate to over 6%, from below 2% just over two years ago.
The central bank is battling inflation, which dropped to 6.8% in the year to July from 7.9% in June, but still remains almost three-and-a-half times higher than its 2% target.
The network’s report points out that the current economic climate has hit the homebuying plans of younger people hardest, with 73% of 25 to 34-year-olds having to change their approach.
It adds that of this group 25%, now say they will need to buy a home with a partner to combine deposit and incomes, 10% with a friend, and 10% with a family member.
Mortgage Advice Bureau deputy chief executive Ben Thompson says: “The difficult and volatile economy has significantly changed the game for prospective buyers. For 15% of this demographic, it means they have already delayed homeownership plans.
“As high inflation levels dig deeper into people’s finances, many will be finding it incredibly difficult to stash away funds for deposits and subsequent mortgage repayments – especially those seeking to buy alone.
“A good way to help generate some extra money to pay for bills or contribute to a mortgage is to consider getting a lodger.
“However, it is important to note that you should still ensure you’ll be able to meet your mortgage repayments each month, and be able to go without that extra cash in the event they move out.”
Mortgage Advice Bureau’s online survey was conducted by Atomik Research, who sampled 1,001 prospective homebuyers between 20 and 24 July.
