First-time buyers are seven years older and pay 30 times more for a house deposit than in 1960s
07 March 2018
The average first-time buyer is now seven years older than in 1960 - and needs to save more than £20,000 extra to be able to buy a home, a study commissioned by Keepmoat Homes has found.
Researchers who polled 2,000 adults found a huge difference in the profile of someone buying their first home through the generations. For example, today, first-time buyers will be in their thirties before they get onto the property ladder and pay £20,622 for a deposit. In comparison, in 1960, the average first-time buyer was just 23 years old paying a deposit of just £595 on their first home, 30 times less than the average deposit today.
James Thomson, CEO of Keepmoat Homes, said: “As the UK’s leading homebuilder for first-time buyers we understand better than anyone the challenges that come with getting onto the property ladder. In fact we sell 72% of our homes to first-time buyers and so the results of the research were very interesting for us.
“It’s worrying to see just how much tougher things have become, particularly since 2000, with the research showing house prices have risen by over £55,000 and the average deposit has increased significantly from £12,988 in 2000 to £20,622 today. It isn’t surprising that the research revealed 69 per cent of people think it’s now harder than ever to buy a home. We are bucking that trend by providing high quality homes, predominantly to first-time buyers. Our average house price is £155,000, compared with £226,756 across the rest of the UK today and £193,008 in the regions outside London.*
The amount of time first-time buyers need to save for a deposit has also spiralled. Researchers found homebuyers in the 1960s spent just over two years saving a deposit of £595 – with an average household income of £2,854 at the time. And since 2011, buyers spent more than five years saving a deposit of £20,622 - more than half the £35,634 average annual household income. A staggering 48 per cent of people have help to the tune of £10,200 towards this cost from mum and dad.
In the 1990s the cost of a deposit was just over a quarter of the average household income of £20,591 and only 26% of first-time buyers had financial help – at an average cost of £3,881. Since the 1990s property prices have increased by 130%, whilst household income has lagged behind, only increasing by 73%.
“The situation for first-time buyers has become increasingly difficult but there are positive things happening too,” said James.
“This includes the Government’s Help to Buy scheme, which has already helped many people onto the property ladder, and the recent abolition of stamp duty for first-time buyers.
“At Keepmoat Homes we are dedicated to building a supply of quality new homes at prices that people can afford. By the end of March 2018 we will have built almost 4,000 homes this financial year. The results of the research show how important it is for us to continue this focus through 2018 and beyond.
The study also found 31 per cent of people are still living in the first home they bought, including one in 10 of those who bought in the 1960s and 15 per cent who bought in the 1980s. And while 84 per cent of first-time buyers were married in 1960, this has dropped to just 27 per cent in recent years.
In fact, first-time buyers are more likely to be in a relationship today rather than married to their partner. One in five first-time buyers today are single – compared to just three per cent in the 1960s.
Two thirds of respondents think people are more likely to end up purchasing a flat or small home, which they will have to move from in order to start a family, to get on the ladder.
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