Katie Marshall was 26 when she bought her first home, a one-bedroom flat in Wimbledon, southwest London, for £220,000. It was 2006 and she and her boyfriend Tom, now her husband, put down a 10 per cent deposit on the 500 sq ft property where they lived for three years.
Nearly two decades later, Danielle McMullen, 38, and her husband, 55, who live with their 13-year-old son in Cardiff, are hoping to finally get on the property ladder and buy a three-bedroom house. The average sold price in their area in the last 12 months was £438,865, according to Zoopla.
They are not atypical of first-time buyers today, since the rising cost of properties and mortgages means that aspiring buyers have to save for longer. Many are now more likely to have a family by the time they can buy, something that, in itself, makes it harder to save.
Katie Marshall was 26 when she bought her first home
DONNA FORD
Marshall knows how lucky they were. Today, she said, getting on the property ladder in that same area with £22,000 would be impossible. “It was perfect and had everything we needed. So much has changed since then, I don’t know what we could buy with that these days.
“We used our savings and my dad gave us a small sum too, but we would never have been able to save that if half of our salary went on rent like it does for first-time buyers today.”
The Marshalls, both 43, were also able to get a foot on the ladder because they were searching for a one-bedroom property — an option that is increasingly limited for anyone looking for their first home.
The share of first-time buyers with at least one dependant increased from 10 per cent in 2009 to 20 per cent in 2023, according to the mortgage lender Santander. It comes as buyers make their first purchase later in life and are more likely to have started a family with children.
• A guide to buying your first home
Graham Sellar from Santander said: “With the average age of first-time buyers increasing in the past decade, more buyers are reaching other life milestones, such as having children, before buying a property.
“This fundamentally changes the landscape for first-time buyers who have a family, as they try to juggle the increasing prices of a larger property in an area with access to good local schools, against additional costs, such as childcare fees, which will impact the amount they can borrow.”
When Katie was pregnant with their first child, she and Tom bought a bigger one-bedroom property that they converted into two bedrooms. In 2011 they upgraded to a house, where they still live with their daughter, 14, and son, 11, in southwest London.
“I worry for my children and how they will possibly get on the ladder. It was so much easier for us,” said Katie, who owns the PR company Luxley Communications.
Bigger family homes are more rare and carry a price premium
GETTY IMAGES
Bye bye twentysomething homeowners
Almost one in five first-time buyers are 40 or over, according to Santander. It completed almost 6,000 agreements in principle — the first step to getting a mortgage — for borrowers over 40 in 2024. The oldest first-time buyer to borrow from the bank this year was 67.
This follows decades of house price growth that has outpaced wages, buoyed by low interest rates in the wake of the financial crisis.
In 2004 the age at which the majority of people owned their own home was 32. By 2022, the latest year for which official data is available, it had risen to 36.
The number of first-time buyers fell 22.4 per cent to 287,430 last year, the lowest since 2013, according to the trade body UK Finance.
Mark Harris from the mortgage broker SPF Private Clients said: “Many first-time buyers have children because not every life decision can be put on hold. Starting a family is one of those things that people don’t want to, or perhaps can’t, put off.
“It also exacerbates the issue of affordability because buyers will then need a bigger home that will accommodate a growing family, rather than a starter one or two-bedroom flat. Such family homes are also more rare and carry a price premium.”
• Here’s what all first-time buyers need to know
Getting on the housing ladder is virtually impossible unless buyers have assistance from parents or other family
ALAMY
Hello high house prices
Over the past 20 years the average price of a terraced house has jumped 104 per cent, outpacing all other property types. The typical price of a flat has increased 76 per cent in that time, while semi-detached homes are up 98 per cent and detached properties 94 per cent, according to the estate agency Hamptons.
“With the cost of childcare factored into affordability calculations, this can make getting a big enough mortgage to purchase a larger property harder than ever,” Harris said.
The average price of a property bought by a first-time buyer has risen by 50 per cent in less than 10 years, according to the mortgage platform Twenty7tec. In June 2015 a typical first-time buyer borrowed £150,923 to buy an average first home worth £193,728. Last month the average loan for a first-time buyer was £221,792 and the average first property price was £289,207.
Harris said: “Getting on the housing ladder is virtually impossible unless buyers have some assistance from parents or other family due to the big gap between income and property prices. The majority of first-time buyers we see have some help in the form of cash deposit, a parent acting as a guarantor or buying together via a joint borrower sole proprietor mortgage.”
The McMullens run an outdoor experience company called Blue Ocean Activities and Events in Cardiff, where they have been trying to buy a three-bedroom property since 2019.
Between them they have been saving for almost 20 years but when the pandemic hit house price growth went into overdrive and made buying impossible.
“All of the properties we’ve seen in our price range are much smaller than the two-bedroom flat we currently rent and we feel like it’s pointless investing all that money and paying off a mortgage for 30 years for a property that is smaller than where we live now.
“Wages and house prices are not in proportion at all. House prices in our area were half the price 20 years ago than they are now, but I am still earning the same as I was back then,” McMullen said.
