Average First Time Buyer age set to fall

The average age of a first-time buyer is set to fall by around six years thanks to the government’s new Help-to-Buy scheme, research from myhomemove has revealed.

Based on data from over 3.700 first time buyer purchases in 2013, the average age of a first-time buyer in the UK is 33, while the average purchase price for a first-time buyer property is £180,000.

Doug Crawford, chief executive officer of myhomemove, said: “Most mortgage lenders currently require borrowers to have a 20% deposit; the equivalent of £36,000 on a property costing £180,000.

“This is a vast amount of money which, according to industry research, will take an average of eight years dedicated saving to achieve, with relatives often being called upon to help top up the balance.

“With the government’s second phase of its Help-to-Buy scheme being launched, we predict that the average age of a first-time buyer will drop by up to six years, to 27, as saving for a 5% deposit could take as little as two years.

“And who knows, the ‘Bank of Mum and Dad’ may be able to take a break, as the government steps in to guarantee the mortgages.”

Unlike its counterpart scheme for new build properties the Help-to-Buy initiative requires little additional work on the part of the home buyer or conveyancer; meaning that once the government’s release date for guarantees has passed (2 January 2014), there is no reason a property bought with a Help-to-Buy mortgage should take any longer to complete.

Peter Lawrence of Lawrence Rand said: “The average age of first time buyers has been steadily increasing over the last decade and, where not assisted by family financial support, is generally held to be even higher than the average of 33 in the myhomemove report.

The introduction of the second phase of Help-to-Buy can only help younger people get on the property ladder due to the lower deposit requirements. It must however be remembered that providing a lower deposit will mean taking a higher mortgage loan and so buyers will need to be able to satisfy the lender requirements in terms of being able to afford the higher loan.

Our mortgage advisers shall be pleased to assist with any queries and tailor the best individual solution for your circumstances.”