More than half (54%) of Scottish adults aged 18 to 34 say the rising cost of living is having the biggest impact on their ability to buy a home, according to new research from Pepper Money, the leading specialist mortgage lender. The findings come as Pepper Money launched its First Charge mortgage proposition in Scotland, at a time when many borrowers are facing more complex financial situations and greater pressure on household budgets.
Research from Pepper Money’s Scotland Specialist Lending Study show that 39% of Scots believe their homeownership plans have been affected by affordability pressures, rising household costs and savings challenges overall. It’s a similar picture among non-homeowners with adverse credit, where 55% say the cost of living is having the greatest impact on them.
The findings also suggests that borrowers with complex income continue to have aspirations to buy. Five percent of Scottish adults with complex income say they plan to purchase a home to live in within the next year, demonstrating that there remains a cohort of prospective buyers who may require a more flexible approach to mortgage lending.
Savings challenges are a clear sign of the strain on household finances. Among Scottish non-homeowners with complex income, 33% have no savings or investments, compared with 29% of non-homeowners overall, while 20% say they do not have enough savings for a deposit. With everyday costs continuing to put pressure on household budgets, limited financial resilience can make it harder to build a deposit or feel confident about taking the next step towards homeownership.
The self-employed are another group facing a mortgage journey that can be more complex, particularly where income patterns are less predictable in a tougher affordability environment. Eleven percent of self-employed Scottish adults say they plan to buy a home to live in within the next year, highlighting a significant pool of potential buyers whose income may require a more considered assessment by lenders. Mainstream lenders don’t always look beyond a standard credit score or payslip, which is where specialist lenders like Pepper Money, who assess income and individual circumstances more flexibly, can help close the gap.
Paul Adams, Director of Sales at Pepper Money, said:
For younger people in particular, the pressure is stark. Our research shows more than half of 18 to 34 year olds say the cost of living is having the biggest impact on their homeownership plans. For many aspiring homeowners more broadly, the immediate challenge is building a deposit while everyday costs continue to squeeze household budgets, with 20% saying they do not have enough saved for one.”
“Savings challenges can quickly become homeownership challenges, especially for customers with complex income or adverse credit, whose circumstances may not fit neatly into standard lending criteria.”
“That is where specialist lending and broker expertise can make a real difference, helping customers be assessed on the substance of their circumstances and supporting those who may need a more flexible route to homeownership.”
Paul Adams,
Sales Director
at Pepper Money