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 years¹.

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) mortgages1. 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 year3. 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 364.

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 1980s1, 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