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Middle-aged first-time buyers on the rise

Middle-aged first-time buyers on the rise
Shekina Tuahene
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Shekina Tuahene

Older first-time buyers have reported the largest growth in the last five years at 6% or more, a report has said.

According to analysis from Tembo, which used product sales data from the Financial Conduct Authority (FCA), the five-year annual average growth rates for 40 to 45-year-old first-time buyers (FTB) is 8%.

The growth rate is 6.9% for those aged 46 to 50 and in the 51 to 55 age group the rate stands at 6.6%. For those aged 50 and over the five-year annual average growth rate is 7%.

This compared to a negative 1.7% five-year annual average growth rate for 18 to 25-year-olds and minus 0.2% for those aged 26 to 30-years-old.

FTBs aged 31 to 35 grew by around 2.3% over the past five years and for the 35 to 40-year-old bracket, the five-year annual growth rate is 4.8%.

The data shows that the overall number of FTBs has grown by 1% on average each year since 2018, with 360,000 FTBs in 2022.

Within that figure, 12,000 first-time buyers were aged 50 in 2022 and the number of first-time homeowners over the age of 50 has grown by nearly a third over the past five years.

London fastest growing region for older first-time buyers

From a regional perspective, London has the lowest proportion of first-time buyers over 50 at 2.4%, followed by Northern Ireland at 2.5% and Yorkshire and the Humber at 2.7%.

The South West had the highest proportion at 3.5%, then the East Midlands and West Midlands at 3.3% apiece.

However, London is the fastest-growing region for older FTBs with the five-year growth rate for this age bracket coming to 64%. This was followed by Northern Ireland at 58% and the East of England at 47%.

Nearly quarter of first-time buyers will be over 40 by 2030

Tembo has projected that, assuming overall first-time buyer numbers stay flat at around 360,000, by 2030 there will be 89,000 first-time buyers aged over 40 by 2030, equal to around quarter of first-time buyers.

For those aged over 50, that number will rise from 12,000 in 2022 to 19,000 by 2030, equivalent to around five per cent of total first-time buyers.

Tembo said that it was taking longer to save for a deposit, housing affordability was more constrained, support from family and friends and government schemes was more vital and there were more mortgages running into retirement.

Richard Dana, founder and CEO at Tembo said: “A perfect storm of factors impacting first-time buyer affordability means we’re now seeing a sharp rise in the number of people waiting until they’re aged 50 or over before they buy their first home.

“This is presenting a challenge to both the financial services industry and would-be home buyers, with many traditional high-street lenders not offering extended mortgage loan terms beyond the age of 75.”