A new analysis from Legal & General Ignite has revealed that during Q1 2024 there was a 13% increase of 56-65 year-olds searching for their first property compared to the same period last year, suggesting that a rising number of buyers are having to wait until their late 50s and beyond to take their first step onto the housing ladder.

Legal & General also found that between April 2023 and 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.

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.

However, Q1 2024 that has now risen to £220,358 which suggests an average house price of £250,000 to £260,000.

Worryingly 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 which is a worrying trend for many industry watchers.

If the mortgage applicant is, say, 28 years old they maybe around 68 years old before the mortgage is paid off – just how much interest will they have paid in that time?

What happened when they want to move to a better home after 10 years and they still need a 40 year mortgage – they may end up downsizing and still have a mortgage – which is now called a later life mortgage.

Brad Bamfield, CEO for Joint Equity says “this only benefits the mortgage industry with buyers tied in for longer and paying much higher amounts in interest over the life of the mortgage.”

“We need real alternatives that provide better security for home owners, removes the connection to interest rate ups and downs, and Joint Equity provides just that.”

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.”

But what about people with no support from Mum and Dad where do they go?