First-Time Buyers Navigating the Housing Market

News at Church Robinson | 08/11/2023

First-Time Buyers Navigating the Housing Market

The dream of owning a home is a significant milestone for many individual. However, entering the property market, particularly for first-time buyers, can be a challenging and costly endeavour. Recent statistics shed light on the experiences and realities of first-time buyers in the UK, revealing a mix of determination, financial resilience, and the importance of family support.

The Average Deposit

According to the English Housing Survey 2021/22 and data from Really Moving, the average deposit paid by a first-time buyer in the UK stands at a substantial £43,693. This figure emphasizes the financial commitment required to take that initial step onto the property ladder. For many, this represents years of diligent saving and careful budgeting.

Income Bracket and Deposit Percentage

Notably, almost two-thirds (63%) of first-time buyers belong to the top 40% income bracket. This highlights the challenges faced by those with lower incomes, who often find it more difficult to amass the required deposit. In fact, 68% of first-time buyers paid less than a 20% deposit, underscoring the importance of accessible mortgage options for those without substantial savings.

On the brighter side, 5% of first-time buyers achieved the impressive feat of purchasing their first home mortgage-free. This group often consists of individuals who inherit property, are gifted a home, or utilize unique financial opportunities.

Funding the Dream

The vast majority of first-time buyers (85%) fund their initial home purchase with their own personal savings. This demonstrates the commitment and financial discipline exhibited by these individuals as they work toward homeownership. Building a substantial savings fund is no small feat, but it's a testament to the determination of those in pursuit of their dream homes.

Family and friends play a significant role in supporting first-time buyers, with 27% receiving financial assistance from their loved ones. This help can range from financial gifts to co-signing mortgages, making homeownership more attainable for many.

In some cases, 8% of first-time buyers are fortunate enough to rely on inheritance to purchase their homes. Inherited funds or property can provide a valuable head start on the path to homeownership.

The Rising Presence of First-Time Buyers

Despite the high costs and financial hurdles, first-time buyers continue to be a dominant force in the UK property market. In the third quarter of this year, first-time buyers accounted for an impressive 53% of all home moves. This is the highest proportion in over a year!

Looking Ahead

As the property market stabilizes and the potential for mortgage rates to decrease becomes more likely, the outlook for first-time buyers is becoming increasingly positive. With ongoing support from family and friends and a firm commitment to saving, the future may see even more individuals entering the housing market as first-time buyers.

Source: #Dataloft, English Housing Survey 2021/22, Really Moving

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