What Is the Average Age of a First Time Buyer In London?

by | Wednesday 7th Jun 2023 | Mortgage News

The average age of a first time buyer is going up. I’m sure that is no surprise to anyone. Most people reading this article probably have stories of how their grandparents and parents bought their first house at the age of 20 for a couple of thousand pounds and will little or no deposit. It really was much easier for first time buyers back in the day, even for a first time buyer in London. A place notorious for high property prices and a property listings that are snapped up, almost as quickly as they are listed. So what is the average age of a first time buyer in London and the UK in general, and could you afford to purchase your first home earlier than you think?

Average Age Of First Time Buyer In London

You may have seen in the news recently that property prices in the UK have dropped and yes that is correct. Due to various economic and social issues, the average price of a property in the UK has dropped over 12 months for the first time since 2012. The average price of a property in the UK currently stands at £286,532. This is a drop of 1.0% from the figure of £289,397 that was recorded as an average in May 2022. As the economic crisis takes a grip of the country, people are spending less money and competition for property has gone down, forcing sellers to reduce their asking prices to ensure a sale.

So this should mean that the average age of someone being able to afford a property is decreasing too right? For London first time buyers, unfortunately this is not the case. The average price of a property in London still currently stands at around £520,000. A whopping £230,600 more than the national average. This is mainly driven up by both £1 million+ properties that are sought after in London and the general allure of living in the capital. Because of this, the average age of a first time buyer in London stands at around 34 years old. Some recent reports, as interest rates increase, suggest that this could rise to 40 very soon.

Average Age Of First Time Buyer UK

Many people looking to buy their first house or flat are delaying their property search for a number of reasons, pushing the average age of first time buyers closer and closer to the average London figure of 34. Some of these reasons are:

  1. Deposit = In the past, lenders offered 100% mortgages where borrowers could finance the entire value of the property, without a deposit contribution themselves. Now, most lenders will need a minimum of 5% deposit with others asking for 10%, 15%, 20% 25% or more! For London first time buyers facing the prospect of purchasing a £500,000 flat, this deposit is a minimum of £25,000. A lot of new buyers are staying renting or living with family for longer, to hopefully saving more deposit. Skipton Building society have recently released a new 100% mortgage product. The first of it’s kind in years. Read more about this product here.
  2.  Some first time buyers are also holding off on purchasing in favour of waiting until they have progressed further in their careers and hopefully earn a high enough income to get a larger mortgage. Generally a lender will be able to lend up to 4.5X income with some lenders offering 5X income mortgages and some offering 5.5X income for higher earners. As house prices are high, the income you need to earn to get a higher mortgage is increasing. Someone purchasing a £500,000 flat with a 10% deposit of £50,000 would need to earn a minimum of £100,000 a year to get a large enough mortgage.

So a combination of high property prices, large deposit requirements, and higher salary requirements are all factors of why the age of first time buyers has gone up over time. But is it all doom and gloom? Could you be able to afford a property sooner than you might think?

How To Get a First Time Buyer Mortgage

If you are thinking about getting your own place, inside London or outside London, you should always speak to a professional mortgage advisor before you do anything else. What they can tell you about your mortgage affordability might surprise you. A mortgage advisor will be able to go through all of your income and outgoings with you and they will be able to tell you exactly what mortgage you can afford, what level of deposit you need to provide, and what you can do to make sure that you are in the best position to buy possible. A lot of people aren’t aware of how mortgage affordability works, and speaking to a qualified mortgage professional can help a lot.

Another option to consider, especially for first time London buyers are schemes like shared ownership. Shared ownership in London is a great way for first time buyers to get on the property ladder, without absolutely breaking the bank. It could also shave years off the average first time buyer age by getting you into a property sooner.

How Does Shared Ownership Work?

Shared ownership is a scheme offered either by the government or a local authority and is usually available on new build houses or flats. The property will be valued at a certain price (£500,000 for example). The local authority will then put the property on the market with the option of purchasing a share of the property, rather than the entire value (normally a minimum of 25% e.g. £125,000). Essentially you would purchase the property for the value of the share (£125,000) and would therefore only need to put down a deposit based on the share value and get a mortgage based on this value too.

For the share that you do not purchase (e.g. remaining 75%) you would pay rent to the local authority per month. So, you would pay a small mortgage amount per month for the share that you own and a rent per month for the share that you do not own. Over time you will have the opportunity to purchase a larger share of the property as your income increases and circumstances change, so that eventually you could own the entire 100% of the property.

Mortgage Broker For First Time Buyer London

If you are considering purchasing your first home, whether now or in the future, read our First-Time Home Buyer Questions To Ask A Mortgage Broker or contact our Putney mortgage team today to see how we can help you make your dream of home ownership a reality. We can go through everything with you and let you know what exactly you can afford and how to go about getting your very own home. 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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