More than a million under-45s in the UK could rule themselves out of the first-time buyer market due to pressures caused by the cost-of-living crisis, an Aviva study has found.

The survey revealed that among people aged below 45 who have never owned a property, just under half (46%) were not currently house-hunting but intended to in future. However, a further 16% said they had no intention of doing so and, of these, one in five (20%) specifically cited the cost-of-living crisis and inflation as making buying a house unaffordable.

According Aviva’s analysis, if attitudes from the survey were reflected proportionally among non-homeowners across the UK, it would equate to more than a million people under 45 being forced to shelve plans to enter the housing market for the first time.

The survey also revealed a disparity between potential homebuyers’ estimates of mortgage cost and actual figures.

Across the country and all age groups, survey respondents intending to buy or in the process of buying their first property said they expected to pay £196,700 on average and anticipated putting down £25,210 as their deposit. Based on these figures, they were expecting a monthly mortgage payment of £718.60.

However, when Aviva researchers put these figures into a high street building society online mortgage calculator in the fourth week of November 2022, the results showed a payment of £1,103.86 per month would be required on a two-year fixed deal, or £928.07 monthly on a two-year base rate tracker – meaning an underestimation among potential buyers of up to 54%.

Matt McGill, Aviva Equity Release MD, said events over the past few months had created uncertainty and an unpredictable outlook. “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,” he warned.