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First-time Buyer

Two thirds of first-time buyers team up to get on the ladder

Two thirds of first-time buyers team up to get on the ladder
Emma Lunn
Written By:
Emma Lunn
Posted:
31/01/2024
Updated:
31/01/2024

Almost two thirds of first-time buyers are teaming up to purchase a home, according to Halifax.

The bank’s latest House Price Index shows that joint first-time buyers (two or more people) now account for 63% of mortgage completions, while first-time buyers made up more than half of all home loans.

High house prices also mean that people are typically 32 when they buy their first property, and there has been an increase in people buying flats rather than houses.

Analysts noted that it’s unsurprising that the majority of first-time buyer applications are joint, given the increase in deposits over the past decade.

First-time buyers put an average deposit of £53,414 down last year, £21,000 more than 10 years ago (+67%).

Although the average salary is higher than it was a decade ago (up 30% to £43,257) getting together a deposit large enough to put down on a first home means raising more than a year’s average pay.

First-time buyer numbers falling

Those buying a property for the first time continued to be the majority (53%) of all home loans last year. However, the overall number fell by 21% to 293,339 last year, compared to 2022.

The average house price paid by those buying their first home in 2023 was £288,136, 5% lower than the previous year. Despite this, house prices for first-time buyers remain more than £132,000 more expensive, on average, than 10 years ago (+86%).

Halifax said that “flats have increased in popularity as a starter home” compared to a decade ago, increasing by 6 percentage points, suggesting that flats may be a more accessible property type for new buyers and a lower relative price point.

The number of first-time buyers choosing a terraced home has dropped by 7 percentage points compared to 10 years ago.

Kim Kinnaird, director at Halifax Mortgages, said: “Following a record year in 2021, unsurprisingly in view of the wider economic environment, the number of first-time buyers joining the property market fell again in 2023 to around 293,000. Despite this drop, new buyers made up over half of all home loans. However, to get a foot on the ladder most people are now buying for the first time in joint names.

“There are a number of schemes available to support first-time buyers, like the mortgage guarantee scheme, which allows us to offer up to 95% mortgages to first-time buyers and has been extended until June 2025. Alternatively, the First Homes scheme offers discounts on new-build homes to first-time buyers, while shared ownership options allow new buyers to purchase some of the property and rent the rest.

“The overall fall in house prices we saw in 2023 will go some way to helping people get on the ladder for the first time – but these buyers are still dependent on a steady supply of properties in their price range, while they are faced with the continued pressure of saving for a deposit, when rent and living costs are high.”