First-Time Home Buyers Will Be In Their Thirties Before They Get Onto The Property Ladder
The average age of a first-time buyer is now seven years older than it was in 1960, they also need to save around £20,000 to be able to buy a home.
A new study which polled 2,000 adults found there was a huge gap in the profile of someone buying their first home through various age generations.
Today, a first-time buyer would most likely be in their thirties before they even get onto the property ladder to pay a deposit of £20,622.
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This a huge difference when you compare it to first-time-buyers in the 1960s where the average age was just 23-years-old and you had to pay a deposit £595 on a first home – this is equivalent of around £12,738 today.
James Thomson, CEO of Keepmoat Homes, who commissioned the research, states:
As the UK’s leading homebuilder for first-time buyers we understand better than anyone the challenges that come with getting onto the property ladder.
In fact we sell 72 per cent of our homes to first-time buyers and so the results of the research were very interesting for us.
It’s worrying to see just how much tougher things have become, particularly since 2000, with the research showing house prices have risen by over £55,000 and the average deposit has increased significantly from £12,988 in 2000 to £20,622 today.
It isn’t surprising that the research revealed 69 per cent of people think it’s now harder than ever to buy a home.
We are bucking that trend by providing high quality homes, predominantly to first-time buyers.
Our average house price is £155,000, compared with £226,756 across the rest of the UK today and £193,008 in the regions outside London.
Researchers discovered that homebuyers in the 1960s spent just over two years saving a deposit of £595 – with an average household income of £2,854 at the time.
How times have changed, now those who have bought – or are buying – since 2011 have spent more than five years saving a deposit of £20,622. This is more than half the £35,634 average annual household income.
As a result, a staggering 48 percent of people had help to the tune of £10,200 towards this cost from their parents.
In the 1990s the cost of a deposit was just over a quarter of the average household income of £20,591 and only 26 percent of first-time buyers had financial help – an average of £3,881.
However, while 84 percent of first-time buyers were married in 1960, this has dropped to just 27 percent in recent years.
In fact, first-time buyers are more likely to be in a relationship today rather than married to their partner.
Also, one in five first-time buyers today are single – compared to just three percent in the 1960s.
The study also found 31 percent of people are still living in the first home they bought, including one in 10 of those who bought in the 1960s and 15 percent who bought in the 1980s.
Despite this, two-thirds of respondents think people are now more likely to end up purchasing a flat or small home, which they will have to move from in order to start a family, to get on the ladder.
The situation for first-time buyers has become increasingly difficult but there are positive things happening too.
This includes the Government’s Help to Buy scheme, which has already helped many people onto the property ladder, and the recent abolition of stamp duty for first-time buyers.
At Keepmoat Homes we are dedicated to building a supply of quality new homes at prices that people can afford.
By the end of March 2018 we will have built almost 4,000 homes this financial year. The results of the research show how important it is for us to continue this focus through 2018 and beyond.
Profiles of the average first-time buyer through the decades: (not taking inflation into account)