The vast majority of first-time buyers underestimate the true cost of buying a property, according to research by Aldemore.

According to the bank’s Q3 2017 First Time Buyers Index, there is a lack of understanding around the house buying process and the costs associated with it.

The bank’s research shows that the cost of a deposit for a property remains the biggest obstacle for first-time buyers, stopping 34 per cent of them from getting onto the property ladder. Meanwhile many of them are underestimating how much of a deposit they will need for their first property, aiming to save £34,693 when in fact they will need on average £49,639. This means they are left with a deposit deficit of around £15,388 or 31 per cent. Aldemore’s researchers found that this shortfall is a particular issue in London.

First-time buyers are also underestimating how long it will take them to save for their deposit, with 58 per cent believing it will take them five years to reach their goal when in fact most take over eight years to save.

They are also ignorant as to the additional costs associated with buying a property, such as solicitors fees and stamp duty. Almost one in three prospective buyers admitted to Aldemore that they don’t know how much this will cost and 40 per cent of those who had bought a home had spent, on average, £2,334 more than they’d anticipated on extra costs.

For first-time buyers, a good understanding of the process is crucial, particularly as there are so many pitfalls along the way. Indeed Aldemore’s research found that 47 per cent of first-time buyers who purchased a property this year experienced the collapse of a purchase at a cost of £1,305 to them.

Charles McDowell, commercial director, Mortgages, said: “It is clear there is a divergence between perception and reality when it comes to the house buying process. This often means those looking to buy are under-estimating the associated costs as well as the time it could take to complete, especially with first-time buyers expecting it to take four years on average to save for a deposit."

He went on to outline the impact this lack of understanding could have on first-time buyers.

“This lack of understanding clearly has financial implications but it can also take its toll emotionally. Our First Time Buyer Index carried out in the second quarter of 2017 revealed nearly one in five (17%) recent first time buyers took three or more attempts to buy their home and the process of buying a first property caused so much stress that over one in three (35%) were made ill.”

One solution to the challenges faced by first-time buyers would be for the Government to cut stamp duty, a move that Mr McDowell would welcome.

“Some have suggested that the Government plans to announce cutting stamp duty for first-time buyers in the Autumn Budget, a step we would welcome," he said. "As it stands, first-time buyers are systematically let down by an overly complex, opaque and costly system."