Joint Efforts: First-Time Buyers Collaborate to Enter the Property Market:

In the challenging economic landscape of 2023, a notable trend emerged among first-time buyers as almost two-thirds opted to team up in joint applications to embark on their homeownership journey. According to recent research from Halifax, 63% of first-time buyer mortgage completions last year involved joint names, reflecting the collaborative efforts of multiple individuals.

Key Highlights:

• First-time buyers represented over half (53%) of all home loans in 2023, marking the highest proportion since 1995.

• Despite this, the overall number of individuals stepping onto the housing ladder witnessed a 21% decline compared to the previous year, totalling 293,339 buyers.

• The joint applications trend signifies a response to the economic challenges, with buyers pooling resources and support to navigate the evolving property landscape.

Financial Landscape:

• The average deposit paid by first-time buyers in 2023 was £53,414, constituting approximately 19% of the purchase price.

• Although this average deposit reflects a £9,057 (15%) reduction from 2022, it is £21,000 (67%) higher than a decade ago, emphasising the increased financial commitment required to enter the housing market.

• Terraced homes emerged as the preferred choice for first-time buyers, constituting 30% of all first-time buyer mortgages. However, their popularity has declined by 7% over the last decade.

Regional Dynamics:

• Inverclyde, Scotland, stood out as the most affordable area for first-time buyers, with properties priced around 2.6 times the average salary.

• Conversely, Islington in North London ranked among the least affordable places, with properties costing a significant 10.6 times the average salary.

• The research highlighted Scotland as a favourable region for first-time buyers seeking affordability and increased chances of homeownership.

Market Dynamics and Outlook:

• Despite a 5% reduction in the average price tag of a home for first-time buyers from its 2022 peak, prices remain over £132,000 (86%) more expensive than a decade ago.

• Terraced homes maintained their popularity, while flats experienced a 6% increase in first-time buyer purchases over the last decade.

• Halifax's research underscores the need for a steady supply of properties within the affordable range to support the aspirations of first-time buyers amid continued pressure to save for substantial deposits.

Assistance for First-Time Buyers:

• Various government schemes aim to assist first-time buyers, such as the mortgage guarantee scheme and the First Home scheme, providing opportunities for home purchase with a lower deposit.

• Shared Ownership allows buyers to acquire a stake in a property, paying rent on the remaining portion.

• The government is reportedly exploring additional measures to further support first-time buyers, recognising the impact of rising mortgage rates on this segment.

In summarising the findings, Kim Kinnaird, Director of Halifax Mortgages, acknowledged the challenges faced by first-time buyers in the changing economic climate. The collaborative approach through joint applications and the availability of government schemes offer glimpses of hope for aspiring homeowners, emphasising the ongoing dynamics in the UK property market.

Written by Veera Josey, 1st February 2024

Sources: Halifax