Challenges first-time buyers are facing

Getting onto the property ladder has been a challenge for some years. But first-time buyers are now facing the most expensive times in more than 70 years.

According to a study, mortgage repayments are becoming a bigger barrier than usual. UK Finance has reported that the average mortgage rate for first-time buyers rose from 2.2% in March 2022 to 5.6% in November 2023.

While these aren’t the highest interest rates in the past 70 years, the strength of the property market means property prices are higher. As a result, it makes mortgage repayments more expensive.

With such challenges, buyers are opting to take longer mortgages. A fifth of first-time buyers now choose terms of 35 years or more. In 2022, fewer than one in ten first-time buyers chose mortgages of that length.

Challenges first-time buyers are facing

Affordability is just one of the challenges first-time buyers are facing. Other issues include…

Bigger deposits

The average deposit for a home has rocketed by 160% in just 19 years. According to the Building Societies Association, this is due to a steady increase in house prices and varying availability of high loan-to-value (LTV) mortgages. Average first-time buyers in the UK can expect to put down £60,000 on their first home! 

In North East England, deposits can be as low as £27,000. But in London that can soar to £144,000!

Getting help

Most first-time buyers are finding they need two incomes that are higher than average to get on the property ladder. Others are turning to family and friends. The Mortgage Dog reported earlier this year that more FTBs are turning to siblings! According to the English Housing Survey, 37% of first-time buyers in 2022-2023 received gifts or loans from family or friends. The previous year, its was 27%.

Renting longer

First-time buyers are finding they are renting for longer than usual. Over the past 20 years, the average age of FTBs renting has increased from 32 to 36, according to the ONS!

Time for change!

The Building Societies Association reports that the UK has never seen so few outstanding mortgages since the end of the 1980s. As older property buyers pay off their mortgages, FTBs are struggling to secure their first home.

It will be lobbying the next government to commit to ‘a package of housing policies that make home more affordable, available and appropriate to the needs of those living in them’.

What can you do?

If you’re a first-time buyer, becoming homeowner can be more than a pipe dream. It might not be as easy as it once was, but our experienced advisers can help. Contact our team today for a quick chat about your dream first home.

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