By David Jarvis For The Mail On Sunday
01:17 28 Jan 2024, updated 01:28 28 Jan 2024
- Data shows growing number of older first-time-buyers between 2018 and 2022
House prices have shot through the roof so sharply in recent years that more of us are having to wait until our 50s to buy our first home.
Figures show a 29 per cent rise in over-50s clambering on to the property ladder at the end of their working life – a time when traditionally many of us would have hoped to have paid off our mortgage and be planning for retirement.
Analysis of Financial Conduct Authority (FCA) data by mortgage specialists Tembo shows a growing number of older first-time-buyers between 2018 and 2022.
There was a decrease of 5,630 18 to 25-year-olds joining the property market – an eight per cent drop over the same period – as they find it even harder to save for a deposit.
There was also a one per cent drop in first-time home purchases among those between 26 and 30 during the same period.
Increases were spotted only in buyers over the age of 31, with those up to 35 rising by ten per cent. There was a 21 per cent jump in those aged 35 to 40.
The trend in first-time buyers grew by 31 per cent among 46 to 50-year-olds.
Tembo CEO Richard Dana said: ‘A perfect storm of factors impacting first-time-buyer affordability means we’re now seeing a sharp rise in the number of people waiting until they’re aged 50 or above before they buy their first home.
‘This is presenting a challenge to both the financial services industry and would-be home-buyers, with many traditional high street lenders not offering extended mortgage loan terms beyond the age of 75.’
London has seen the most dramatic growth in first-time buyers aged 50 or older with a 63 per cent rise over the five-year period.
It was followed by Northern Ireland on 58 per cent, the East of England on 46 per cent, and the South East on 36 per cent.
Tembo claims the trend has been caused by a culmination of first-time buyers taking much longer to save for deposits, increasing house prices and the greater availability of mortgage deals later in life. Mr Dana added: ‘Our average customer has a deposit of £74,000, and if a buyer was to save £150 a month in a lifetime Isa savings account that would take about 22 years.
‘There is also a growing number of mortgages that run well into retirement, meaning becoming a homeowner with a mortgage in your 60s is now entirely possible.’
The average detached property cost £268,000 in 2013, says the ONS. Today, the figure stands at £457,222.
Prime Minister Rishi Sunak and Chancellor Jeremy Hunt were reportedly considering a move to allow first-time buyers a mortgage with a one per cent deposit to boost ownership. But critics have said the plan to attract young voters will lumber them with bigger mortgages.
The mortgage guarantee scheme, which has been extended until June 2025, allows first-time buyers to get a mortgage with a minimum five per cent deposit. But Mr Hunt aims to cut deposits to one per cent in his spring Budget, the Independent reported.
However, Money Saving Expert’s Martin Lewis said a lower deposit means mortgage rates tend to be higher. And critics argue it is a ‘short-term’ fix that does not solve housing shortages after Government targets to build 300,000 homes a year were missed.