More than a million Britons under 45 may rule themselves out of the first-time buyer market, due to financial pressure caused by the cost-of-living crisis, reveals a survey from Aviva.  

The report, focused on those who have never owned a property, says that 46% of this group were not currently house hunting, but intend to in future.  

A further 16% add they have no intention of owning a home. Of these, one in five cite “the cost-of-living crisis and inflation as making buying a house unaffordable,” the study says.  

If these attitudes were reflected proportionally among non-homeowners across the UK, this equates to more than a million people under 45 being forced to shelve plans to enter the housing market for the first time.  

The poll was conducted by data group Censuswide, among 2,002 adults from 18 to 44 who are currently not a homeowner and have not been one previously, between 16 and 23 of September.  

The report adds that the cost of a mortgage is being “substantially underestimated, with the potential to dissuade more people from moving onto the property ladder”.  

It says those in the survey who intend to buy, or are in the process of buying, their first property, say they expect to pay £196,700 on average and anticipate putting down £25,210 as their deposit. Based on these figures, they say they are expecting a monthly mortgage payment of £718.60.   

But, when these figures were put into Nationwide’s online mortgage calculator this week, the report says prospective homebuyers will on average pay £1,103.86 per month on a two-year fixed-rate deal, or £928.07 monthly on a two-year base rate tracker, an underestimation of up to 54%.   

Aviva equity release managing director Matt McGill says: “The cost-of-living crisis, and other factors resulting in higher inflation and interest rates, have put pressure on people juggling competing financial demands.   

“Events of the past few months have created uncertainty; nobody can predict the outlook for the coming months with any confidence.  

“Despite resilient housing market activity, it now appears rising mortgage rates are dissuading many from taking that important first step onto the property ladder.   

“In years to come, this will have a knock-on effect for younger people today. Wealth held in property contributes greatly to someone’s overall assets and can be used as a valuable source of funds, particularly later in life. In the event of any property market adjustment, most people’s most valuable asset will still be their home.”  

The study adds that the role of intergenerational giving “remains as important as ever” for helping FTBs onto the property market.  

It says that 12% of respondents say they expect a gift, or loan, from parents to help meet their costs, and 4% said they expect the same from grandparents.   

Individual contributions are more generous from grandparents – typically they contribute a gift of £18,850, and £16,990 as a loan, compared with £17,730 and £14,130 respectively from parents.  

If this level of gifting, or loaning, were seen across the FTB market, this would represent more than £23bn of FTB costs being provided by the buyer’s family, the report says.  

Aviva’s McGill adds: “The amount of support being given or intended by different generations of the family to first-time buyers is substantial.   

“We have seen this trend, particularly of grandparents providing funding, increase in recent years. Family members are more and more willing to use wealth they have accumulated in property over the years to provide younger people with a leg up onto the property ladder.”