Number of first time home buyers in UK nearly doubles according to the Barclays Mortgages’ First Time Buyer Index

Number of first time home buyers in UK nearly doubles according to the Barclays Mortgages’ First Time Buyer Index

  • Most start saving for their first property at the age of 24, whilst average age at completion is 32
  • Almost three quarters (73 per cent) wish they’d started saving sooner and 64 per cent worry they will never be able to afford to get on the property ladder
  • More than half (56 per cent) of first time buyers are reliant on family support

(PRESS RELEASE) LONDON, 7-Mar-2022 — /EuropaWire/ — Barclays (LON: BARC), a British multinational universal bank, has announced that proprietary data from the Barclays Mortgages’ First Time Buyer Index reveals that the number of first time home buyers in the UK has nearly doubled in 2021 as compared to the previous year, which affirms the optimistic market conditions for first home purchases.

The number of first time buyers has doubled over the past year, with 2021 volumes up 98 per cent on 2020, according to proprietary data¹ released today in Barclays Mortgages’ First Time Buyer Index.

The Index combines Barclays’ own data with consumer research², polling over 2,000 potential or existing first time buyers to build a comprehensive picture of the UK’s first time buyer market.

First time buyers who got on the property ladder in 2021 paid an average £281,900, which represented a drop from the average price paid in 2020 (£294,500) but a rise from pre-pandemic levels recorded in 2019 (£249,700), according to Barclays own data.

The data also shows that the average income of a first time buyer (buying solo) has risen from £45,900 in 2019 to £50,300 in 2020, and to £50,800 in 2021.

The average total income of joint first time buyers has risen from £63,800 in 2019 to £72,200 in 2020, and to £70,500 in 2021.

Additionally, over half of those surveyed (56 per cent) said they wouldn’t have been able to get on the property ladder without family support.

Raising the deposit

Barclays’ data shows the average deposit paid by a sole first time buyer in 2021 was £61,100, a figure which fell significantly from £71,400 in 2020. For joint buyers, the average deposit was £61,000 in 2021 which decreased slightly from £63,800 in 2020. Survey respondents cited the struggle to save for a deposit as the single biggest obstacle to home ownership (35 per cent).

According to the research, the average first time buyer starts saving at the age of 24, with Barclays proprietary data revealing that the average age at completion is 32, which has remained static for the past three years. Almost three quarters (73 per cent) of those surveyed said that they wish they had started saving for their deposit even sooner.

Many first time buyers are reliant on other methods of financial support in order to raise the required deposit for their starter home. While personal savings remains the primary method of raising funds (62 per cent), over half of those surveyed (56 per cent) said they wouldn’t have been able to get on the property ladder without family support.

Claire Macphail, Mortgage Expert at Barclays, said: “It’s encouraging to see that first time buyers have been able to get onto the property ladder in increasing numbers since the start of the pandemic. However, despite numbers nearly doubling across the last year, it’s worrying to hear that many still believe that they’ll never be able to afford their first property.”

“Our index points to the importance of first time buyers being supported by family so it’s essential for lenders to innovate to provide new ways in which first time buyers can get a head start. Barclays, for example, offers different mortgage options for first time buyers, including the Family Springboard mortgage, which allows family or friends to provide 10% of your property price as security, which they’ll then have returned with interest.

The knowledge barrier

Over half (55 per cent) of budding or existing first time buyers confess they don’t know how to go about the process of buying their first property.

When asked about their level of awareness around additional costs, 39 per cent said they didn’t know they would need to factor in solicitors’ fees, while over half (54 per cent) were unaware that they might need to pay stamp duty, if not otherwise exempt.

The stark reality of the time, effort and finances involved in purchasing a property has caused high levels of despondency amongst potential first time buyers. Almost two thirds (64 per cent) of those looking to buy their first home believe they will never get on the property ladder.

However, first time buyer Perveen Gill, who purchased a two-bed flat in Woolwich with her partner in June 2021, after saving for 7 years for a deposit, offers words of encouragement:

Buying as a couple can be quite a high pressure situation and it’s understandable why many are nervous when buying with a partner. But, in my experience, the planning and stress of it all really is worth it in the end! My advice is to focus on saving in a sustainable way that fits both your needs, so you find a balance between short-term enjoyment and longer-term investment; educate yourself on the process so you go into situations informed; and understand where you have power to negotiate so you can save some cash!

Barclays offers a range of mortgage products to help first time buyers get on the property ladder, including help to buy, shared ownership and the Family Springboard Mortgage. For more information, head to the Barclays Mortgages website.

– ENDS –

Notes to editors:

1. Barclays own data based on first time buyer completions in 2021

2. Research conducted by Censuswide in February 2022, polling 2,011 first time buyers (defined as those who are looking to buy their first property and those who have bought their first property within the last 5 years)

About Barclays

Barclays is a British universal bank. We are diversified by business, by different types of customers and clients, and by geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group.

For further information about Barclays, please visit our website www.barclays.com

Press Office contact: ismail.jan2@barclays.com / 020 7116 8267

Appendix

Financial situation of first time buyers in the UK¹

Average… FTBs in the UK in 2021
….purchase price £281,900
…age at completion 32
…deposit amount (sole) £61,100
…deposit amount (joint) £61,000
…LTV 81%
…monthly payment £845
…income (sole) £50,800
…income (joint) £70,600

Method of raising deposit among potential/existing first time buyers²

Desired by FTBs
1 Personal savings 62%
2 Government scheme i.e. Help To Buy 24%
3 Inheritance 17%
4 Gift from parents 16%
5 Through investing 13%

 

Biggest obstacles to getting on the property ladder amongst potential/existing first time buyers²

Experienced by FTBs
1 Limited savings / struggling to save for a deposit 35%
2 Priced out by high house prices 30%
3 Lack of options in price range in desired location 28%
4 Finding an appealing property 27%
5 Lack of understanding on how to apply for a mortgage 22%

 

Most sought-after region based on first time buyer completions¹

Regions ranked according to volume of FTB completions in 2021 % change compared to 2020
1 South East 91%
2 Greater London 46%
3 North West 113%
4 Scotland 59%
5 West Midlands 143%
6 Yorkshire and the Humber 139%
7 South West 136%
8 East Anglia 128%
9 East Midlands 115%
10 North East 123%
11 Wales 113%
12 Northern Ireland 217%

 

Most sought-after features among potential/existing first time buyers²

Desired by FTBs
1 Garden / outdoor space 50%
2 Driveway / parking space 39%
3 At least one spare bedroom 31%
4 Plenty of storage 27%
5 Close to schools 25%
6 Separate living room 24%
7 Close to shops / restaurants 24%
8 Close to public transport 21%
9 Downstairs bathroom 19%
10 Garage 18%

 

Condition of property first time buyers have bought / are looking for²

Desired by FTBs
1 Property that needs a small amount of work e.g. new carpet, cosmetic decoration 33%
2 New build, ready to move in 25%
3 Relatively new property, no work needed 21%
4 A fixer-upper e.g. one requires a new kitchen/bathroom 15%
5 A project property requiring significant work e.g. structural renovation 2%

Types of property first time buyers have bought1

Ranked according to volume of FTB completions in 2021 % change compared to 2020
1 Semi-detached house 109%
2 Flat – first floor and above 78%
3 Mid-terraced house 100%
4 Detached house 102%
5 End terraced house 112%

SOURCE: Barclays

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