Considerations For FTBs
Getting onto the property ladder has always been a challenge, but
perhaps even more so at the moment. A report has found that it is
currently the most expensive time to be a first-time buyer (FTB) in over
70 years.¹
Managing monthly payments
Higher mortgage repayments are a particular barrier to homeowning; between
March 2022 and November 2023, the average mortgage rate for FTBs increased
from 2.2% to 5.6%.² To make monthly costs more affordable, people are often
opting to take on longer mortgages, with a fifth of FTBs in 2023 choosing terms
of 35 years or more. In the previous year, fewer than one in ten opted for
mortgages of this length.
Larger deposits
Since 2005, the average home deposit has increased by 160% – largely due to a
steady increase in house prices and varying availability of high loan-to value
(LTV) mortgages.¹ Now, the average FTB in the UK can expect to put down
£60,000 on their first home. However, this figure varies significantly depending
on the region – it can be as high as £144,000 in London, or as low as £27,000 in
North East England.
Calling in help
To get on the property ladder, most FTBs will either need two incomes that are
higher than average, or financial support from family or friends. In fact, 37% of
FTBs in 2022-23 received a gift or loan from friends or family, compared with
27% the previous year.³ This means that those most likely to lose out on home
ownership are either on a lower income, buying alone, or cannot receive help
from family.
Older renters
The challenges facing FTBs mean that hopeful homeowners are often forced to
stay in the private rented sector for longer. Over the last two decades, the
average age of an FTB has increased from 32 to 36.⁴
Calling for change
The experiences of FTBs reflect the condition of the wider property market. The
UK has not seen such a low level of outstanding mortgages since the end of the
1980s, so serious consideration must be given to how to make homeowning
more affordable. With the General Election imminent, the Building Society
Association reflected that a new government ‘should commit to a package of
housing policies that make homes more affordable, more available, and more appropriate to the needs of those living in them and the world we live in.’
Seek advice
We understand that it can feel overwhelming trying to get your foot on the
property ladder, but you don’t have to do it alone. We can explore the options for
you and help to make your home owning dreams a reality – just get in touch for
advice.
Your home may be repossessed if you do not keep up repayments on
your mortgage
1 Building Societies Association
2 UK Finance
3 English Housing Survey
4 ONS