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First-time buyer mortgages up 2.6% last year – Uswitch

According to statistics from Uswitch, there were approximately 874,000 first-time buyer mortgages in 2022-23, an increase of around 22,000 from the previous year (+2.58%).

However, this was a significant drop from the peak of 957,000 in 2020-21 (-8.7%).

As of 2022-23, the average age for a first-time buyer in England was 34; two in five (40%) were couples without dependents, with almost a third (32%) being one-person households.

During 2022-23, the average deposit for first-time buyers in England was £53,414.

Just under three in five (58%) first-time buyers were in the top two income quintiles; a third were aged over 35, 20% were aged 35 to 44, and 13% were aged over 45.

16-24-year-olds have seen a decline in their share of the first-time buyer market.

With 65,000 purchases in 2022-23, they represented just 7.4% of sales – down from 9% (69,000) in the previous year.

Those aged 45 and over now make up 13% of the overall figure with 113,000 sales – continuing the rise from 5% in 2019-20.

The average age of a first-time buyer in England (excluding London) decreased over the last year.

After a decade of fluctuations between 32 and 33, the average age of a first-time buyer increased by more than a year between 2020-21 and 2021-22 to 33.4.

The 2022-23 figure of 33 is 0.4 years lower, on average, than in 2021-22 (33.4).

In contrast, the average first-time buyer age in London increased, after being on a downward trend in recent years.

Following a decade-high average age of 36.7 in 2018-19, the average age fell to 33.8 in 2020-21 and 2021-22.

This has since increased to 35.3 in 2022-23 – the third-highest average age since 2003-04 (behind 2013-14 and 2018-19).

Almost two-thirds (65%) of first-time buyer mortgage quotes between 2022-23 were to those who applied using the title ‘Mr’.

Those applying using the title ‘Mrs’ received, on average, the highest loan amount at £223,525, while their unmarried counterparts (‘Miss’) typically received quotes of £172,578.

Almost half (49%) of potential first-time buyers claimed that house prices would need to fall between 11% to 20% before they would consider buying a home, with a further 13% claiming prices would need to drop more than 20%.

In recent years, the decline in first-time buyers was less pronounced in London, with a 2021-22 decline of around 6% from its peak of 155,000 in 2020-21.

This was substantially less than the rest of the country, which saw figures fall from 803,000 to 706,000 (-12%) in 2021-22.

London has recovered from this downward trend in the last year; between 2021-22 and 2022-23, London experienced almost a quarter (23.97%) increase in the number of first-time buyers, from 146,000 to 181,000.

In contrast, England (excluding London) underwent a 1.84% decrease in first-time buyer figures, dropping below 700,000 (706,000 to 693,000).What is the average age to buy a house in the UK as a first-time buyer?

The vast majority (94%) of individuals who requested a mortgage quote for the first time in 2022-23 were employed on a full-time basis.

Typically, they requested an average mortgage loan amount of £201,525.

While the percentage share was similar to the year prior (93.98%), the average loan amount increased by almost £10,000, from £191,848 (+5.04%).

In contrast, only 6% of those unemployed or retired sought a mortgage quote between 2022-23.

Their average loan amount was just £800 more than their full-time working counterparts, averaging at £202,307.

Those in the lowest income band made up the lowest proportion of first-time buyers in 2022-23, accounting for just 6.2% (54,000).

However, this represented an increase from 4.5% (39,000) a year before.

Only the first and third quintiles saw an increase on the previous year; the third quintile underwent the greatest increase, from 20.4% (174,000) to 27.1% (236,000).

The quantity of first-time buyers generally increased with each income band, before peaking at the second-highest band (fourth quintile).

With 262,000 first-time buyers, this income band accounted for 30% of sales for 2022-23, a slight decrease from the previous year (32%, 295,000).

The vast majority (87%) relied on savings as the primary source of their deposits (748,000 homes) in 2022-23.

This represented a slight increase from the previous year, when around 85% of first-time buyers saved for a deposit (704,000 homes), but remained below the peak of 91% in 2020-21.

Almost two-fifths (37%) of UK first-time buyers received their deposit as a gift or loan from a friend or family member, making this the second most common source.

This is a large increase from the previous year, when just over a quarter (27%) purchased their home with a gifted deposit.

One in 10 (9%) first-time buyers relied on inheritance to fund their deposits in 2022-23, a rise of 1% in 2021-22 and an increase from 68,000 to 73,000 homes.

Couples with no dependant children were the most common type of first-time buyers in England, accounting for 40% of the total purchases in 2022-23 (346,000 homes).

Lone parents with dependant children were the least likely, accounting for just 2.1% of the overall figures.

Representing 18,000 sales, this was a decrease from 26,000 in the previous year.

This demographic was only marginally behind other multi-person households; with 20,000 homes, they accounted for 2.3% of first-time sales in 2022-23.

The second most popular type of first-time buyer to purchase a property in 2022-23 was single-person households.

Around 283,000 homes were sold that year to this demographic, representing around a third (32%) of all first-time buyers.

Between 2022-23, 71% of first-time buyer mortgage quotes were for those intending to buy a house, with an average loan amount of £207,634.

This was an increase on 2021-22, when houses accounted for more than two-thirds (68%) of quotes, with an average loan of £189,285.

More than a quarter (28%) of quotes between 2022-23 were for flats, with an average loan amount of £189,872.

This was nearly £18,000 less than the typical quote for first-time buyers purchasing a house – in the previous year quotes for flats were around £5,000 more than those for houses.

Maisonettes formed just 2% of total quotes between 2022-23, yet generated an average loan amount of £206,171 for UK first-time buyers.

The UK as a whole faced a decrease in the average mortgage amount for those purchasing their first property.

In 2023, the average cost of a first-time mortgage was £234,722, down 2.01% from the previous year (£239,537).

Greater London faced the greatest decrease in average mortgage amounts afforded to first-time buyers, dropping 1.91% to £383,386 in 2023 (from £390,848).

The region with the greatest increase in average mortgage amounts between 2022 and 2023 was Yorkshire and the Humber, rising 3.05% to £170,970 (from £165,914).

Two in five (40%) of non-homeowners in the UK do not intend to buy a home within the next five years.

Of these, more than half (53%) referenced affordability as the primary reason for not buying a home, with a further quarter (26%) citing the recession.

The number of people intending to buy a home was higher among those aged between 25 and 34, with only around 25% of respondents in this age group claiming they did not intend to buy a home within the next year.

Around 25% of respondents predicted that their budget for buying a home would be £150,000 or less.

This figure was almost 50% lower than the October 2022 average UK house price of £295,000, while than half (57%) believed their budget would be no higher than £300,000.

Based on an average rate of saving from an average UK income between October and December 2023, it now takes 12 years for a typical UK first-time buyer to save enough money for a house deposit.

UK Finance suggests a typical deposit for a UK first-time property purchase in 2023 was around a fifth (19%) of the property purchase price, down from just under a quarter (23%) in 2019.

Based on the average deposit for first-time buyers statistics from 2023, this figure stood at £53,414 – down over £9,000 from the average in 2022 (£62,471).

Greater London skews this average somewhat, with an average first-time buyer deposit of £108,848 in 2023 – though this is down by 14.51% from 2022 (£127,320).

The 2023 figure represents more than double (+103.78%) the average deposit paid by first-time buyers in the United Kingdom as a whole for the year, £53,414.

In Scotland, the average first-time buyer deposit in 2023 cost around £39,691, over £2,000 less than in 2022, at £41,487 (-4.33%).

First-time buyers in Wales parted with an average of £36,350 for their deposits (-2.75%), while this figure was £31,948 for those in Northern Ireland (-3.68%).

First-time buyers in the North East had the smallest average deposit in 2023, at £29,740 – more than three times less than the average deposit for first-time buyers in London.