According to first-time buyer research from HSBC UK’s annual ‘Beyond the Bricks’ survey, the average age people expect to get onto the property ladder is now 39 years old. This compares to those who are already on the property ladder who bought their first property at 28 years old on average.
The research also found that more than half of those looking to buy their first home already have a family to support.
Two thirds of people (64%) who want to buy expect to do so with someone else, with one in ten having to club together with a friend or family member to get on the housing ladder.
In order to make a mortgage more affordable, both the length of mortgage term being taken and the loan-to-value (LTV), the percentage of the property being borrowed, have also increased significantly.
Since January 2018 the average length of mortgage taken out by first-time buyers has increased by three and a half years, and now sits at 27 years 8 months.
First-time buyers are now, on average, taking out mortgages for six years longer than those already on the property ladder; and the average LTV for first-time purchases has increased from 72% LTV to 81% in under a year and a half.
First-time buyers have been benefiting from the government’s soon-to-end Help To Buy ISA scheme, the research has found.
The average age of first-time buyers taking out a Help to Buy ISA is 27½, they have saved have saved an average of almost £3,500 before buying a property and getting the government bonus; and are receiving £866 on average as a H2B ISA bonus.
Aaron Shinwell, HSBC UK’s interim head of mortgages and savings, said: “It is encouraging to see recent figures showing that first-time buyer activity is increasing. We have worked hard over recent years to provide first-time buyers with options to help them buy a property, including introducing 95% LTV mortgages, increasing our maximum mortgage term to 35 years, and an attractive Help To Buy: ISA interest rate.
“With the scheme no longer accepting new applications after November, opening an account before that could make a real difference to when a first-time buyer gets the keys to their first home.
“It is a concern, however, that the expectation of first-time buyers is that they will not be able to get on the property ladder until they are 40 years old, especially as more than half of those looking to get on the property ladder already have children to support.
“We’re committed to supporting first-time buyers so the old adage ‘life begins at forty’, doesn’t become synomymous with buying a first home.
“With almost four in five first-time buyers using a broker it’s been an important part of our strategy to provide more brokers with access to our great value products and services.
“We recently announced our 100th broker partnership, and now we are already up to 110, giving over 13,500 broker access to our mortgages, while simplifying our processes to help brokers help their clients buy their first home.”
HSBC UK’s Help To Buy: ISA offers an interest rate of 2.25% AER up to £12,000. This rate is accurate as at 11 July 2019.
