Cohabitation Nation

May 1, 2023
Information published was correct at the time of writing

Over 60% of first-time buyers opt for a joint mortgage as a means of scaling the property ladder...

“The average cost of a home for first-time buyers in 2022 increased by 13%, reaching £302,010.”

More than six in ten first-time buyers are now going joint on the property ladder, according to the latest analysis[1]. This trend towards shared ownership instead of lone purchases can be attributed to several factors, including economic necessity and lifestyle preferences. Cohabiting couples may also find that their combined incomes make it easier for them to qualify for larger mortgage loans than either could get on their own.

They benefit from pooling resources when it comes to putting down a deposit and other costs associated with buying a home. In addition, splitting living expenses increases affordability for both partners and helps them build up equity faster.

‘RACE FOR SPACE’

The average age of a first-time buyer has increased to 32 years old, with the number of first-time buyers decreasing by 11% in 2022 compared to the previous year, the analysis identified. Nonetheless, the figures for first-time buyers were still higher than pre-pandemic levels, except for the record spike seen in 2021 and the peak in 2006. In 2021, a combination of factors such as pent-up demand from the pandemic, government measures to ease stamp duty costs, and a ‘race for space’ led to a record number of first-time buyers purchasing their first homes.

ENOUGH SUPPLY

Moreover, the analysis also indicates that joint mortgage completions involving two or more people now account for almost two thirds (63%) of all mortgage completions. More than 362,000 people entered the property market in 2022, with first-time buyers comprising over half of all home loans. However, purchasing a new home for the first time now typically involves paying over £300,000 and putting down an average deposit of £62,000.

While the number of first-time buyers remains high and even exceeded previous years except for 2021 (which saw record demand) and 2006 (the peak year), the cost of buying a home is still significant. Buyers may welcome the anticipated drop in more recent property prices this year but only if there is enough supply. Saving for a deposit can also be challenging for some first-time buyers due to the length of time needed and cost.

“The average age of a first-time buyer has increased to 32 years old, with the number of first-time buyers decreasing by 11% in 2022 compared to the previous year, the analysis identified.”

AVERAGE DEPOSITS

The average cost of a home for first-time buyers in 2022 increased by 13%, reaching £302,010. This increase resulted in average deposits accounting for 21% of the purchase price, equating to an average deposit of £62,470. This marks an 8% increase from the previous year.

Despite these significant costs, first-time buyers continue to account for over half (52%) of all loans on homes – the highest figure seen in the last decade. It’s becoming increasingly common for first-time buyers to apply for mortgages in joint names as the average property values are now around 7.6 times the average UK salary.

Don’t forget, our professional friendly advisers are on hand to support you and can help you explore all of your options.

Source data:

[1] Research based on data from the Halifax’s housing statistics database, UK Finance statistics (including Halifax estimates based on the expected levels of market completions given the prevailing economic environment and lead indicator of market applications), and ONS ASHE data on average earnings – 25 January 2023.