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The Changing Face of First-Time Buyers

The Changing Face of First-Time Buyers

Through our analysis of average salaries, cost of homes, insurance premiums and the types of housing available, we've mapped the ever-changing face of typical first-time buyers in the UK over the last 20 years. Buying a property has always been a huge investment, but what is required to get on the housing ladder in 2018?

Saving for a home

We studied the details of 1,000 Brits, including both first-time homeowners and those who are yet to buy a house, to identify how long on average it takes to save for a home.

The analysis shows that, for most non-home-owning Brits, putting money aside for a deposit is not a priority, despite renting costing an average of 2% more per month than a mortgage.

Number of first-time buyers

The number of first-time buyers each year has dropped significantly over time. Between 2005-06 and 2015-16 there were 21,000 fewer first time buyers (from 675,000 to 654,000), but when looking back further, from 1995-96 to 2005-06, there was a decrease of 247,000 buyers.

The age of homeowners has also changed significantly in the last 40 years. In 1981, nearly one in three 16-24 year olds was a homeowner. In 2016, it was one in 10. Meanwhile, the proportion of renters in younger age groups has increased - by 14% among 16-24 year olds since 1996.

As a result of these statistics the average age of a first-time buyer has increased steadily over time across the UK. Across the UK the average age of a first-time buyer has risen from 30.5 in 2007 to 33.1 by the end of 2017. In London the average age is even higher, standing at 34.1 in 2017.

Salary versus house prices

The study also found that the average annual salary has risen much more slowly than the costs of housing over the period analysed, meaning it is becoming much harder to buy a house.

Salary as a proportion of the average cost of a house has reduced on average by 0.68% each year since 1999. Back then, a year's average salary was equivalent to 23.3% of a house but by 2017 this figure had dropped to only 11.03%. As a result, first time buyers are reliant on saving a larger deposit, even taking steps such as moving back in with parents to afford a mortgage to get on the housing ladder.

Gender and home purchasing

While the overall number of first-time buyers has dropped, it might be expected that the gender split between buyers has grown more even as the workplace has become more equal.

However, between 1995 and 2006, women remained less likely to be purchasing their first home than men. Women made up approximately 40% of purchases between 1995 and 2006 and by 2016 this figure had dropped to only 31%.

However, no women at all were listed as joint tenants (sharing ownership of a property) in 1995-96, but from 2005 onwards, this number has risen to 30% of the share of first-time buyers.

Joint home ownership

Between 1995-96 and 2005-06, the analysis showed little marked difference in the proportions of individuals vs couples buying properties for the first time. But in recent years by 2015 the data showed a shift of 6% towards couples buying properties rather than people on their own.

This suggests that, as getting on the housing ladder becomes more difficult, prospective buyers are more likely to be relying on someone else to help them buy their first home.

House types across England and Wales

The price of all properties has gone up over time, but none quite so much proportionally as flats.

The price of a flat in England in 2017 was £290,557 on average, just under 5 times higher than the average price of buying a flat in 1996 where you could get your hands on the keys for £59,016.

By comparison, the cost of a semi-detached house in 2017 is 3.7 times higher than 1996, at £245,272 on average.

If flats continue to increase by 8% in price as they have done on average in the past 20 years, by 2038 the cost of an average flat could rise to as much as £778,757.62.

Insurance costs

Contrary to the majority of other costs, home insurance costs have actually decreased in the last few years. Contents insurance has dropped on average by £24.46 since 2013 from £79.42 to £54.96,  and building insurance from £104.88 to £87.28. Combined insurance has dropped the most, by £35.46 on average, from £158.11 down to £122.65.

Find out more information about getting a mortgage if you are a first time buyer here


All data used has been produced by reputable government sources, or is first party data from MoneySuperMarket.