Mortgages  

Profile of first time buyers in 2017 revealed

Profile of first time buyers in 2017 revealed

Today’s first time buyers are older, more likely to buy with a partner, and to have dependent children compared with a decade ago, according to new analysis by the Department for Communities and Local Government.

The average first time buyer deposit is now a staggering £94,088 in London and a slightly more manageable £40,931 in the rest of the country.

The English Housing Survey 2015 to 2016 of first time buyers published today (13 July) shows that the number of first time buyers has not changed in the last 10 years, but numbers are down on 20 years’ ago.

In 2015-16, there were 654,000 first time buyer households in England, equivalent to 3 per cent of all households, and 5 per cent of all owner occupier households. In 2005-06, there were 675,000 households that were first time buyers, which was down from 922,000 in 1995-96.

In 2015-16, the average (mean) age of first time buyers was 32, up from 31 in 2005-06.

One in five (21 per cent) first time buyers was aged between 35 and 44 years in 2015-16, up from 16 per cent in 2005-06.  

In 2015-16, three quarters (74 per cent) of first time buyers were couple households, a marked change since 2005-06 (66 per cent). This may be due to an increasing need for two incomes to be able to buy. 

Over the same period, the proportion of first time buyer households with dependent children increased from 23 per cent to 37 per cent. 

First time buyers have higher incomes and more help with funding their deposits than they had 20 years ago.

Two thirds (66 per cent) of first time buyers were in the two highest income bands in 2015-16. The proportion of first time buyers in the highest income quintile has increased from 24 per cent in 1995-96 to 33 per cent in 2015-16.

Between 1995-96 and 2015-16, there was an increase in the proportion of first time buyers that had help from friends and family for their deposit (from 22 per cent to 29 per cent).

Two thirds of first time buyers pay a deposit for their first home of up to 20 per cent. In 2015-16, the mean deposit for all recent first time buyers was £48,831.  Mean deposits were higher in London (£94,088) than elsewhere (£40,931).

The most common source of deposit reported was savings, which has increased in importance between 2005-06 and 2015-16 (from 66 per cent to 81 per cent).

Commenting on the figures, Ray Boulger, mortgage expert at John Charcol, said the numbers should be met with a degree of caution.  

“The problem with averages is they cover a huge range from those who put down a 95 per cent deposit to those who put down a 50 per cent deposit with help from their parents and grandparents to get a bigger discount on their mortgage, and this can make it look as if everyone needs a massive deposit which is not always the case.”

Russell Quirk, founder and CEO of online estate agents eMoov.co.uk, said:  “The plight of the modern first-time buyer is one that many existing homeowners will be glad they don’t share.