It’s no secret that it’s a tough moment to be a first-time buyer.
The cost of living is spiralling, and house prices have been steadily rising for years, making it more difficult than ever for first-time buyers to get a foot on the property ladder.
In July, the Government hinted at the introduction of 50-year mortgages that could be passed down generations, in a bid to tackle the UK’s current housing crisis and make mortgages more accessible.
The rising cost of living means it is taking first-time buyers longer to save up to buy a house, and that’s if they can afford to do so at all.
A survey carried out by Nationwide in 2022 found that 70 per cent of potential first-time buyers are choosing to delay their plans to purchase property because of cost pressures. The same study found that 88 per cent of prospective first-time buyers are worried that rising living costs are harming their efforts to save for a deposit, while 48 per cent have reduced the amount they are saving towards a deposit.
In this article, we identify the challenges that first-time buyers are facing and how this is affecting the average age to buy a house in the UK.
What are the challenges facing first-time buyers?
First-time buyers are finding it more difficult than ever to meet the requirements to get a mortgage and buy their first home.
Let’s take a look at some of the key obstacles that they’re facing in 2022.
Rising house prices
Data published by Halifax in 2020 highlighted the shocking rate at which property prices have been rising over recent years. The report found that prices for first-time buyers had risen by 69 per cent between 2010 and 2020, with the average price rising from £142,473 in 2010 to £241,025 a decade later.
By 2021, this figure had risen a further three per cent to £264,140. Unfortunately, wages are not growing at a comparable rate, making property unaffordable for many.
Expensive deposits and fees
Most lenders require first-time buyers to put down somewhere between five and 25 per cent of the property price as a deposit to secure a mortgage. With the average price of a first-time mortgage standing at £264,140 in 2021, as mentioned above, this means saving up a minimum of £13,207 just for the deposit. This would rise to nearly £26,000 for a typical 10 per cent deposit. On top of this, first-time buyers also need to factor in the cost of legal fees and surveys too.
Rising interest rates
Interest rates have recently been raised from 1.25 per cent, putting them at their highest level in 13 years. As interest rates rise, mortgage repayments become more expensive. For many first-time buyers, rising interest rates could make mortgage repayments unaffordable or too risky unless they can get a fixed mortgage.
Rising living costs
As well as pushing up the cost of mortgage repayments, rising interest rates also affect other living costs, including the cost of rent, travel, energy, food shopping, and more. The higher cost of living makes it more difficult for first-time buyers to save for a deposit.
Not only is a property in this country unaffordable for many, but there are also not enough houses to meet demand. That shortage allows landlords to charge more for rent, making it more difficult for those that want to save to buy a house. It also makes it more difficult for first-time buyers to find an affordable house in the area they wish to live in.
What is the average age of first-time home buyers in the UK?
Buying your first house is no easy feat these days, so it’s no surprise that it is now taking people longer to save up and buy their first home.
Over the years, as house prices have risen, so has the average age at which people get their foot on the property ladder.
In January 2022, Halifax published a report titled Halifax First-Time Buyer Review 2021.
According to this report, last year in the UK, the average age of first-time buyers was 32 years old. The average age was 29 back in 2011, so it has been steadily rising.
The average age of first-time buyers is highest in London, where it is 33 years old, but has now risen to over 30 in every region of the country.
It is thought that several factors have contributed to first-time buyers getting older as the years go on. Of course, first and foremost, rising house prices and living expenses mean that it is taking longer to save the deposit required to get a mortgage. The same report found that in 2021, on average, first-time buyers paid a deposit of £53,935 on a property costing £264,140.
But also, people’s lifestyles are changing. There is less of a rush to settle down young, more people are prioritising travel and higher education over buying a house.
It’s not all doom and gloom for first-time buyers, though, as there are several government schemes and initiatives available to help people to buy their first home, including the First Homes Scheme, Stamp Duty relief, the mortgage guarantee scheme, and Help to Buy Equity Loans.
According to Halifax, the number of first-time buyers rose by 35 per cent in 2021, the biggest jump on record since 2006, and it’s unclear at this point whether rising living costs have dampened the appetite of first-time buyers during 2022.
Here at Mistoria Estate Agents Cheadle, our professional team have extensive knowledge of the areas around Cheadle in Manchester. If you’re looking to buy your first home, get in touch with our team, and we can help you to find properties that meet your criteria at the best prices possible.
Search for a property in Cheadle on our website or give our team a call on 0161 519 9554 to find out if we have any properties available that meet your requirements.