The challenges faced by first-time buyers

At Homeward Legal, we regularly follow what is happening in the markets, and especially for First-Time Buyers, since this is the group that has had the most difficulty on getting on the property ladder in recent years.

Halifax has produced its latest monthly House Price Index and has analysed the state of the market for First-Time Buyers. First, what is of interest is the assessment of the differences between the First-Time Buyer of today against those of a decade or two before.

The reliance on the famed Bank of Mum and Dad is firmly in the spotlight still, with 40% of first-time purchases being helped with such loans for the deposit, while buying a share in a property or with friends is increasing in popularity to spread the load of repayments.

In comparison with 2000, the average age of the first-time buyer has increased from 29 to 33, but the biggest problem is the pace at which asking prices have far outpaced the rise in the average wage, which means the first-time buyer today needs to find far more for the deposit on average than their counterpart of yesteryear.

Nevertheless, there are some interesting points that Halifax's analysis has made:

• The number of first-time buyers in 2024 was almost 20% higher than that of the previous year. In part, the stamp duty offset for first-time buyers has helped the number interested in buying a home.
• On average, first-time buyers are currently expected to find just over £61,000, which is where the help from other sources such as parents and other relatives comes in.
• The typical cost of the first home is now, on average, just over £310,000.
• The age of the first-time buyer has risen by two years to 33 in the past decade.
• The most affordable first-time buyer property can be found in County Durham in the North-East of England at £39,245. This equates to 3.6 times the average salary for the area.
• The least affordable first-time buyer property is, perhaps unsurprisingly, in London (£622,115 in Hammersmith & Fulham), which equates to around 10 times the average salary.
• Taking the country as a whole, average property values are now sitting at 6.6 times the average annual salary (£46,970).
• The average cost of a first-time buyer home in 2024 was £311,034 (which is up 8% against the same period in 2023), with deposits averaging 20% of the agreed asking price. This means the average first-time buyer is putting down a deposit of £61,090, which is around £7,500 (+14%) more than the same period in 2023.

Amanda Bryden, Head of Mortgages at the Halifax, said: 

“Last year saw a big increase in the number of first-time buyers, up almost a fifth from 2023. 

“This likely reflects an improvement in mortgage affordability, as interest rates eased and stabilised, providing more certainty for those stepping on to the ladder.

“Many are still teaming up to make the numbers work, with most buying homes jointly. 

“This makes sense given the average deposit of £61,090 and an average starter home price of £311,034, which can be a stretch for those with a single income. 

“It's not surprising the average first-time buyer is now 33 years old, the oldest in the last two decades.

“Despite the challenges of saving for a deposit and rising house prices - up 8% in 2024 - it's encouraging that first-time buyers still account for more than half of all new mortgages, the biggest majority ever recorded.”

All of this can seem rather bewildering - and even off-putting, given the large sums that are involved with purchasing that first property. However, it's still worth pursuing that goal of stepping on the first rung of the property ladder. Anecdotal evidence shows that those who have bought their property, particularly when living with parents or renting for a long period, experience a sense of calm and freedom with the decision.

Getting to the point of being able to put in an offer on a property, backed up with the finances to provide the required deposit and keep up with mortgage payments in the future can seem daunting, but there will always be help available, both in the mortgage products available and help schemes for First-Time Buyers put in place and supported by the Government.

As Amanda Bryden goes on to say:

“While the journey to homeownership can look daunting, there are lots of tools and schemes available to help, such as mortgage products tailored for those buying a first home, or Shared Ownership can also be a route to stepping on the property ladder at lower cost.

“The best first step is to speak to a mortgage adviser or broker. By understanding what you need to save and what's affordable, you can turn the dream of owning a home into reality.”

If you are buying your first home, you'll want to minimise the expenditure on the process without forfeiting the quality of the service provided. So, you'll want to ensure that your outlay for the legal side of the process is protected, even if the transaction falls through just before completion.

To this end, look no further than Homeward Legal. 

Our conveyancers will start work on your plans as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process, which means you can effectively budget for your conveyancing needs.

There are some unforeseen items that might arise during the purchase and/or sale, which includes a specialist flood assessment report, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

Or you can get a quick quote, using Homeward Legal's easy-to-use quote generator.