The Changing Landscape of First-Time Home Buyers in the UK

The dream of buying a home for the first time has long been a cherished aspiration for countless individuals. However, in recent years, the journey to homeownership, especially for single first-time home buyers, has faced increasing challenges due to high house prices, unfavourable mortgage rates and affordability issues.

Let’s delve into the changing landscape of first-time home buyers and explore how Mortgage Saving Experts can help get you towards achieving the dream of owning your first home.

A Shift in the Percentage of Single First-Time Home Buyers

Over the past two decades, while the percentage of new house purchase loans taken out by first-time buyers (FTBs) has been on the rise, there has been a notable decline in the proportion of mortgages secured by single first-time buyers. In 2006, singles accounted for 53% of all FTB loans, a number that has now dwindled to just 46%. These figures highlight the challenges single FTBs face in their pursuit of homeownership.

The Impact of Affordability and High House Prices

With housing currently at its most unaffordable level in approximately 150 years, first-time buyers, in general, are feeling the pinch. The rate of homeownership among 25-34-year-olds has dropped from around 59% in 2003 to a mere 41% today, underscoring the urgency of addressing these challenges.

A Glimpse at Recent Data

Recent data from UK Finance reveals a decline of around 9% in the number of loans to first-time buyers in 2022 compared to the previous year. However, what’s noteworthy is that the proportion of loans to FTBs as a percentage of all house purchase loans has reached an all-time high of 54%. This reflects the enduring desire of individuals to become homeowners.

The Alarming Decline Among Singletons

Among the figures, the most concerning trend is the decline in the proportion of FTB loans taken out by single applicants. In 2022, this figure dropped to 45%, reversing the temporary increase seen in 2021 during a stamp duty holiday.

In 2006, singles comprised 53% of all loans to FTBs, but this has been steadily declining due to ongoing affordability issues. In the first five months of 2023, the proportion stood at 46%.

Why We Should Be Concerned

The decline in the number of single first-time buyers entering the housing market is a matter of concern. First-time buyers are vital to the health of the housing market, and the dream of owning one’s home remains as strong as ever.

However, demographic shifts, including an ageing population, increased divorces, and more people choosing to live alone, have altered household compositions, leading to a surge in demand for properties from singletons.

Unfortunately, this has coincided with a lack of housing supply, pushing house prices to unprecedented levels.

The Silver Lining: Shared Ownership

Amidst the challenges faced by first-time home buyers, there is a glimmer of hope, especially through the shared ownership scheme. This innovative program allows borrowers to purchase a share of a home’s overall value and pay rent on the rest.

Shared ownership has quickly become the preferred choice for many FTBs, with over three-quarters of private registered provider shared ownership sales catering to their needs.

For single first-time buyers, shared ownership offers a significantly improved chance of stepping onto the housing ladder. In 2021-22, approximately 56% of shared ownership purchases were made by single adults, compared to just 29% for FTB households in general.

Not only does this program reduce the average deposit required, but it also provides an earlier path to homeownership for younger individuals.

The Ongoing Challenge: Insufficient New Build Homes

Despite the benefits of shared ownership, singletons still face immense pressure to enter the housing market due to the insufficient construction of new homes, particularly affordable ones.

In England, only around 28% of new build properties constructed in 2021-22 were classified as affordable homes. The UK is estimated to require 5 million new homes over the next 15 years, but this target exceeds the government’s current annual goal of 300,000, a level not achieved since 1971.

The Call to Action: Addressing the Housebuilding Problem

As the upcoming general election approaches, it is imperative that solving the housebuilding problem takes centre stage for all political parties. Ensuring an adequate supply of new homes is essential to making homeownership a reality for aspiring first-time buyers.

Your Path to Homeownership with Mortgage Saving Experts – Mortgage Brokers For You

At Mortgage Saving Experts, we understand the challenges first-time home buyers face in today’s housing market.

Our dedicated team is committed to helping you navigate the complexities of mortgages, find the best financing solutions, and achieve your dream of homeownership.

Our mortgage advisers will help you find the most appropriate mortgage lenders and mortgage deals, ensuring you’re prepared to buy your first home.

Don’t let the hurdles of the mortgage market deter you; reach out to us today and take the first step toward making your homeownership dream a reality. Let’s work together to secure your place on the housing ladder!

Contact us today on 01273 738 072 to speak to one of our friendly advisers.

Mortgage & Insurance
Brokers in Brighton

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