There have always been challenges involved with buying a first home, but what specifically are they and what does the future hold for FTBs?
FTBs getting older In 2004, over half of adults owned a home at the age of 32 but by 2022, the age had risen to 36 [1]. According to Santander, so far this year, 18% of their borrowers who are FTBs have been over 40, with their oldest first-time buyer aged 67. Hopeful homeowners are therefore stuck renting for longer. However, that also comes at a high cost as UK private rental costs increased by 9.2% in the year to March 2024.
Family help Those that do manage to get onto the property ladder usually come from wealthier backgrounds, as most FTBs either need two high incomes or financial support from Bank of Mum and Dad. In fact, in 2018–2020, nearly half of FTBs in their 20s had help from family members [2]. Moreover, it has been found that, for 25 to 39-year-olds, children of homeowners are twice as likely to have their own home than those whose parents are renters.
Dreams on Hold It is perhaps no surprise that the current difficulties have caused 49% of prospective FTBs to pause their plans over the last year [3]. When asked about their reasons for delaying, the majority(53%) cited high house prices, whilst 41% said that high mortgage costs were a barrier.
Finding a compromise Over the last five years, 38% of new homeowners have had to sacrifice something in order to secure their first purchase. For many (40%), the compromise was buying a property that needed some renovation, while 34% settled down in a different location to where they first planned.
Helping you through it While we appreciate these are challenging times, where there’s a will, there’s a way, we are here to help you work towards your property dreams.
[1] ONS, 2024
[2] IFS, 2023
[3] Nationwide, 2024
🚨 Data accurate as of the date of publication –07.08.2024
🚨Information within this blog is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed.
🚨Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
🚨 The above material is for informational purposes only and does not constitute a sales offer or financial advice. Before taking out any insurance, credit agreement or other financial product, you should obtain individual advice on your requirements and the general terms of the contract.
Source: Quilter Financial Planning – Essentially Mortgages Q3 2024
