Starting the mortgage journey

Starting the mortgage journey

July 13, 2022

Research highlights the average first-time buyer starts saving at the age of 24

THANKS TO THE housing market rebound during 2021, the number of first-time buyers nearly doubled compared to the previous year with volumes up 98% on 2020, according to new data released[1] and combined consumer research[2]. This is great news for the economy, as first-time buyers are a crucial part of the housing market.

First-time buyers who got on the property ladder in 2021 paid an average £281,900, which represented a drop from the average price paid in 2020 (£294,500) but a rise from pre-pandemic levels recorded in 2019 (£249,700).

BIGGEST OBSTACLE The data also shows that the average income of a first-time buyer (buying solo) has risen from £45,900 in 2019 to £50,300 in 2020, and to £50,800 in 2021. The average total income of joint first-time buyers has risen from £63,800 in 2019 to £72,200 in 2020, and to £70,500 in 2021.

Additionally, over half of those surveyed (56%) said they wouldn’t have been able to get on the property ladder without family support. The survey respondents cited the struggle to save for a deposit as the single biggest obstacle to homeownership (35%).

DELAYED SAVING The average deposit paid by a sole first-time buyer in 2021 was £61,100, a figure which fell significantly from £71,400 in 2020. For joint buyers, the average deposit was £61,000 in 2021, which decreased slightly from £63,800 in 2020.

According to the research, the average first-time buyer starts saving at the age of 24, with the data revealing that the average age at completion is 32, which has remained static for the past three years. Almost three quarters (73%) of those surveyed said that they wish they had started saving for their deposit even earlier.

“Many first-time buyers are reliant on other methods of financial support in order to raise the required deposit for their starter home.”

FINANCIAL SUPPORT Many first-time buyers are reliant on other methods of financial support in order to raise the required deposit for their starter home. While personal savings remains the primary method of raising funds (62%), over half of those surveyed (56%) said they wouldn’t have been able to get on the property ladder without family support.

Over half (55%) of prospective or existing first-time buyers confess they don’t know how to go about the process of buying their first property. When asked about their level of awareness around additional costs, 39% said they didn’t know they would need to factor in solicitors’ fees, while over half (54%) were unaware that they might need to pay stamp duty, if not otherwise exempt.

FIRST HOMES SCHEME The stark reality of the time, effort and finances involved in purchasing a property has caused high levels of despondency amongst potential first-time buyers. Almost two-thirds (64%) of those looking to buy their first home believe they will never get on the property ladder.

The cost of living crisis for some first-time buyers will mean they now find it more difficult to be able to afford a property. If you’re a first-time buyer, you may be able buy a home for 30% to 50% less than its market value, under the government’s First Homes scheme. The property can be a new home built by a developer, or a property you buy from someone else who originally bought it as part of the scheme. The First Homes scheme is only available in England.

WANT HELP WITH YOUR JOURNEY TOWARDS YOUR FIRST HOME?

We’re here to help you find a mortgage that is suitable for your needs and ensure that everything goes through as quickly and with as little fuss as possible. To make an informed decision about the right mortgage for you or to discuss your situation, contact The Official Mortgage Company – telephone 01777 809700 – email admin@officialmortgages.co.uk

Source data:
[1] Barclays own data based on first-time buyer completions in 2021
[2] Research conducted by Censuswide in February 2022, polling 2,011 first-time buyers (defined as those who are looking to buy their first property and those who have bought their first property within the last five years)

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

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