A new profile of a first-time buyer in 2023 sheds some light on the latest buying trends, and it could also help landlords know their target market.
A lot has changed when it comes to homebuying patterns over the past decade, including a number of characteristics of a typical first-time buyer. In general, new buyers are older than they once were, having lived in rental accommodation or with parents for longer, and they must also save up much larger deposits.
House prices in the UK have soared over recent years, and the government has attempted to counteract this for first-time home buyers by offering a number of schemes and incentives. This includes the Help to Buy ISA, shared ownership schemes and a reduced stamp duty rate to get people on the housing ladder.
To some extent, this has been successful, with first-time buyers now making up a larger market share (52%) of total buyers when looking at mortgage numbers, according to recent statistics from confused.com. This compares to 40% back in 2012.
A typical first-time buyer today
Confused.com has analysed data from a number of sources to drill down into the typical characteristics of today’s first-time home buyers. Along with having an average age of 32, up from 30 in 2012, they typically now earn in the region of £34,000 per year.
The average deposit paid, according to the latest figures from 2022, is £62,470, which is 21% of the average purchase price of £302,010. This is 8% higher than 2021’s figures, demonstrating how much property prices grew during the period.
However, this figure is somewhat skewed by London, where a first-time buyer needs to fork out an average deposit of £125,378. At the other end of the scale, buyers in the north east paid £30,198 towards their property purchases last year, while those in the north west paid £37,483.
Just over half (57%) of first-time mortgage applicants last year were joint applicants buying with another person, with the remaining 43% buying property alone. And only 21% of first-time buyers had children, demonstrating that a large number of people wait to buy a property before having children.
Interestingly, despite the higher property prices, the greatest number (73,588) of first-time buyers in 2022 were based in the south east. This was followed by London with 48,390, then the north west with 37,534.
Insight into the rental market
With around a fifth of all households in the UK now living in privately rented accommodation, it seems the majority of people will live in a rental property before they finally get onto the housing ladder.
While affordability is clearly an issue for many prospective buyers, the private rented sector is also appealing to those who want greater flexibility, or to live in a more desirable location, perhaps with a group of friends, than they would be able to afford if they were to think about buying.
The quality and standard of the UK’s rental offering is continuously improving, with emerging sectors like build-to-rent providing tenants with more amenities and offering a lifestyle as well as a place to live. More investors are also renting out new-build or more modern properties due to changing EPC rules in the sector.
This data from confused.com can therefore be a useful tool to analyse target tenant types. For example, the highest average age to buy a first property is in London (33), indicating that landlords may be catering towards a slightly older tenant market in the city.
Demand across the private rented sector has been booming in recent years, matched with an undersupply of housing in both the buyer’s market and in lettings. The housing provided by buy-to-let landlords is therefore more crucial than ever for the many thousands of tenants seeking homes.