According to new figures the average first-time buyer this year was 30 years old, with an annual salary of £36,299, which is 4% higher than the average annual salary was last year.
The number of first-time buyers able to save a deposit fell from 51% in April to 41% in July. A large amount of first-time buyers in the UK needed extra help to buy a home, 36% received financial help from family, 9% from inheritance, 2% from family help with mortgage payments and 4% received help from government schemes such as the ‘Help To Buy’ scheme.
Many first time buyers are having to consider lengthening their mortgage repayment terms from the standard 20 years to 40 years to enable them to get into the housing market.
By increasing the term on a £200,000 mortgage from 25 to 30 years will reduce your monthly payments by £101, decreasing it from £1,056 to £955, but it will add more than £27,000 to the final interest bill. If a buyer increases their repayment to 40 years, this will reduce the payments to £836 per month, but will cost an additional £84,000 over the period of the mortgage.
Buy-to-let activity in the market place is still growing at an astounding rate, people’s earnings are generally not keeping up with inflation which has resulted in would be buyers unable to save up the deposit needed to buy their first house, even with government backed schemes being available.
In a recent survey, the biggest reason for people being unable to get onto the housing ladder was their inability to save up the amount needed to secure a loan on a property, as well as the rising costs of stamp duty.
Source: LSL Property Services.