Budget hopes for struggling first-time buyers

**Budget hopes for struggling first-time buyers**

Pre Ramteke says she wants to purchase her first home, but saving for a deposit while also paying rent is still proving difficult.

She pays about £900 a month in rent before bills, yet says putting aside enough for a deposit to buy her first home is still beyond reach.

Since moving to the UK from India in 2021, she and her partner have found it hard to buy a home because of rising house prices and the cost of living.

Her worries come before this week’s Budget, when the government is expected to give more details about its proposed Your First Home scheme, which is designed to help more first-time buyers get on the property ladder.

“Sometimes I do think that I'm trying to chase a dream that's going further and further away”, she told the BBC.

The average interest rate on a new five-year fixed mortgage deal has reached 6% for the first time in three years, while house prices continue to climb.

Ramteke finished her studies in London and later relocated to Rugby, hoping to settle there.

“We know that if we buy a property, the instalments are going to be the exact same as the rent is right now. But the deposit is what is the biggest challenge for us,” she said.

She believes it may take three to four years to save enough for a deposit on a typical three-bedroom home.

Estate agent Zunara Tariq, from Oakmere Signature Homes, said affordability is still one of the biggest problems buyers face.

She said: “It's a really tough time to save for a deposit. Even people who are on [big] salary jobs are finding it really hard.

“Affordability is a massive thing that we've seen at the moment, and cost of living and affordability work hand in hand.”

Estate agent Zunara Tariq said many first-time buyers were struggling to save for a deposit while coping with higher living costs.

Although she welcomed government help, Tariq said no one scheme would suit everyone.

She said prices were still rising and lenders were becoming more cautious.

“Any support available is positive support in the right direction, but it may not always be practical and it isn't always suitable for every first-time buyer,” she added.

Tyne Steele, a self-employed electrician who is also saving for his first home, said renting while trying to build a deposit was difficult.

He rents a home with his partner and said that although sharing expenses helped, surprise bills could quickly reduce savings.

He said: “It is hard to save. If your car breaks down, it could be £1,000 gone out of that savings pot.

“[The] cost of living, that needs to be addressed.”

Tyne Steele said saving for a first home while renting could be hard, especially when unexpected costs come up.

He welcomed incentives such as the Lifetime ISA, but said dealing with broader financial pressures should still be the main focus.

“I'd rather owe one person money to the bank, [rather] than the government and the bank,” he added.

The government has said its proposed Your First Home scheme would help address the deposit hurdle facing would-be homeowners and support more people into home ownership.

The scheme is expected to provide 2.5% deposits, along with government-backed equity loans, for eligible first-time buyers purchasing new-build homes.

Tariq said buyers should get professional advice and understand all their options before making such a major purchase.

“Every single buyer has a different experience,” she said.

“You're only a first-time buyer once, so make sure you're fully educated before you buy anything.”