Average Mortgage Term For First-Time Buyers On The Rise

by | Friday 15th Mar 2024 | Mortgage News

The the average first-time buyer mortgage term has increased

The the average first-time buyer mortgage term has increased

First-time buyer (FTB) mortgages in the UK are experiencing notable shifts, with recent data from TSB shedding light on some new emerging trends. According to TSB’s latest findings, the average first-time buyer mortgage term reached 32 years in 2023, marking a steady increase from 30 years in 2021. This increase highlights both the struggles that first-time buyers are facing with rising property prices and economic uncertainties. But also the way that brokers and buyers are having to evolve and adapt to tackle the property and mortgage market.

Average First-Time Buyer Mortgage Term Increases With Property Prices

In 2023, FTBs accounted for a substantial 35% of all mortgage completions, reflecting their significant presence in the housing market. Even in the first few months of 2024 when interest rates have risen, we as a mortgage broker are still getting a large amount of first-time buyer enquiries, which is great to see. Interestingly, the average age of FTBs dipped slightly to 31 years old in 2023, down from 32 in 2022.

First-Time Buyer Trends In The UK

A noteworthy observation from the data released by TSB is the popularity of joint mortgages among FTBs, with over half (57%) opting for this arrangement rather than buying alone. In opposition, 43% of first-time buyers were in the position to be able to buy alone.

Regionally, Scotland emerged as a frontrunner in FTB activity, constituting 17% of TSB’s first-time buyers, followed closely by the South East (16%) and North West (12%).

First-Time Buyers In London

However, the story is notably different in London, where the property market presents very unique challenges for FTBs. With the average price of properties in the capital (Approximately £505,300) significantly higher than the national average (approximately £284,69), Londoners often find themselves entering the property ladder at a later age compared to their counterparts in other regions. Going by the rough estimate that you can borrow around 4.49X your income, and using the maximum 95% mortgage limit as an example, a first time buyer or buyers would need to earn a minimum of £106,912 either solely or jointly to be able to afford an average purchase in London.

Encouraging News For First-Time Buyers

Despite these challenges, there’s encouraging news for prospective FTBs. Many may find they can afford more than they realise, especially with the current low interest rates and various government schemes aimed at supporting first-time buyers. However, navigating the complexities of mortgage affordability requires careful consideration and expert guidance.

That’s where mortgage advisors like ourselves at Oportfolio Mortgages can help. With our expertise and tailored approach, we help FTBs explore their options, understand their borrowing capacity, and secure the most suitable mortgage deals. Our mortgage advisors offer a free initial mortgage affordability check for anyone who needs it, to help you to understand what you can afford and what steps you need to take to get there.

If you or anyone else you know is looking at purchasing their first home and needs a bit of guidance, please feel free to give our team a call today. We are here to help.

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If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

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