"As affordability begins to ease, we’ll likely see further activity in the first-time buyer market, especially if inflation continues to fall and the Bank of England reduces its base rate later in the year"
- Kevin Roberts - Legal & General Mortgage Services
New proprietary data from Legal & General Ignite has revealed a 13% increase in Q1 2024 of 56-65 year-olds searching for their first property compared to the same period last year. This figure suggests a growing number of buyers are having to wait until their late 50s and beyond but are still keen to take their first step onto the housing ladder.
The bigger picture for first-time buyers
Further insight from Legal & General Ignite found that over the last year (April 2023 – April 2024) 38% of potential buyers in the UK were first-time buyers, with an average age of 33.
When comparing Q1 2024 and Q4 2023, there was a 37% increase in 18-30-year-old first-time buyers searching for a property, and a 33% increase in 31-40-year-old first-time buyers. There was a natural decline in overall market activity in the lead-up to Christmas, so these increases mark a return to activity in the spring months.
Average loan value and average term searched
Further analysis from Legal & General Ignite found that the average loan value searched for by advisers on behalf of first-time buyers over the last year was £217,125.
When comparing Q1 2024 to Q1 2023, the average loan value searched for increased by 0.81% from £220,358 to £222,148. However, when comparing Q4 2023 to Q1 2024, the average loan value searched for by advisers increased by 3.7% from £214,299 to £222,148. This analysis highlights that buyer affordability is perhaps beginning to ease as average monthly earnings increase and inflation drops, meaning buyers can afford larger loan values.
The most common mortgage term searched for by advisers on behalf of first-time buyers was 31-35 years (36%), followed by 26-30 years (24%) and 36-40 years (17%). This shows there is a tendency to lean towards the higher end of the mortgage term spectrum, potentially to find a more affordable deal. When looking at the broader market, the most common mortgage term searched on the platform was 31-35 years (28.5%), followed by 26-30 years (22.4%) and 21-25 years (18.4%).
Kevin Roberts, Managing Director, Legal & General Mortgage Services: “Our figures show that the desire to own a home remains strong, even for those who are waiting longer to take those first steps onto the property ladder. As affordability begins to ease, we’ll likely see further activity in the first-time buyer market, especially if inflation continues to fall and the Bank of England reduces its base rate later in the year.
“There are a number of factors likely to be impacting people’s decisions to buy a property. High rental prices may encourage some customers toward homeownership. Equally, as mortgage rates decreased at the start of the year, customers who had been waiting for the right time to buy may have found products which are more affordable.
“While affordability has eased somewhat, we know the Bank of Family has still been playing a key role in the housing market, either by gifted deposits or via practical support to help family members who are trying to save for their first home. This support from parents, grandparents, and other family members reached record levels in 2023, helping 318,400 property purchases with an astonishing £8.1 billion worth of lending.
"58% of the value of intergenerational support goes to help first-time buyers. However, if that housing ownership dream is going to be achieved we’d still recommend buyers seek out a professional mortgage adviser to give them the best guidance on their options. ”
