First-time buyers opting for bigger properties

Michael Lloyd

July 15, 2019

First-time buyers are opting for more detached houses and bigger properties compared to 2007, Accord Mortgages has found.

The proportion of buyers choosing a detached home has doubled from 6% before the economic downturn in 2007, to 12% in 2018. And the share of three and four-bedroom homes has grown from 52% to 61% over the same period.

Nitesh Patel, strategic economist for Accord Mortgages, said: “As the market has fluctuated, we’ve seen some significant changes to the profile of a first-time buyer.

“Rather than buy a small ‘starter home’, schemes such as stamp duty relief and Help to Buy have given first time buyers the financial support to choose larger properties and perhaps ‘future-proof’ their purchase.

“Coupled with the now widespread availability of 95% and 90% LTV mortgages, which did reduce following the economic downturn in 2008, it would seem those wanting to get on the property ladder now have ambitions to do so with a home which would have been seen as unobtainable to their parents or grandparents.

“Additionally, the wider availability of longer fixed term mortgages has also made it attractive for aspiring first-time buyers with the uncertainty around future interest rates.

“This combined with a strong jobs market has seen first-time buyers now account for half of all house purchases compared with 36% in 2007.

“Whilst our data shows the average age of a first-time buyer has only increased slightly since 2007, it follows that as the life ‘milestones’ of getting married and having children are being achieved later, that the majority (a quarter) of first-time buyers are now in the older age group of 30-34 as people choose to focus on their careers, travelling and enjoying a mortgage-free lifestyle in their 20s.”

Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, added: “Buying your first home is both an exciting and daunting prospect, whatever your age or choice of home.

“We know brokers offer invaluable advice to those wanting to get started and can discuss the various options available, as well as considering future plans to ensure the buyer has a product which will suit them for the full term.

“In the last 12 months, we have seen increased demand for our higher LTV products as well as good uptake of our Help to Buy and new build products, suggesting that the first-time buyer market is, and will remain, buoyant.”

In 2007 nearly half (46%) of all first-time buyer mortgages were for the purchase of a terraced house, while in 2018 this had reduced to a third (34%).

Whilst the average age of a first-time buyer has only slightly increased from 30 to 31 in the last 11 years, the majority of those entering the property market are now older, with a quarter of buyers in the 30-34 bracket in 2018, compared to just a fifth (20%) in 2007.

The analysis is based on data held by Accord on first-time buyer mortgages provided by the lender and its parent organisation, Yorkshire Building Society, between 2007 and 2018.

Sign up to our daily email