Twenty percent of first time buyers are over 40

A significant proportion of first-time homebuyers are now over 40 years old, reflecting a trend where more families are delaying home purchases until after having children, according to Santander.

Economic pressures and escalating house prices have prompted couples to prioritize starting families before embarking on homeownership journeys. Santander's data indicates that over 10% of first-time buyers now have dependents, including children.

Statistics from the Office for National Statistics reveal that the average age of first-time buyers has increased from 32 years old in 2004 to 36 years old in 2022. Over the past two decades, house prices have nearly doubled, rising by 98%. As of March this year, the average house price stood at £283,000, compared to just £142,571 in March 2004.

Graham Sellar from Santander remarked, "With the average age of first-time buyers rising over the past two decades, it appears that more buyers are reaching significant life milestones, such as starting families, before taking their first step onto the property ladder." The recent mortgage tightening triggered by Bank Rate increases from December 2021 has further strained prospective homeowners.

Since August last year, the Bank of England has maintained its interest rate at 5.25%, with expectations of a reduction not anticipated until September due to higher-than-expected inflation figures last month.

Financial analysts from Moneyfacts noted significant changes in mortgage rates, with the average two-year fixed-rate increasing from 1.99% in July 2020 to 6.85% by August 2023.

Similarly, five-year fixed-rate deals rose from 2.25% to 6.37% during the same period, marking a 183% increase. Meanwhile, the value of mortgages in arrears has surged to levels not seen in almost a decade, reflecting the impact of high interest rates on borrowers.

According to new data from the Bank of England, mortgage arrears increased by 4.2% in the first quarter of this year, reaching £21.3 billion from the previous quarter. This represents a 44.5% rise compared to the same period last year and marks the highest level since July to September 2014.

Interest rates are expected to fall during the second half of 2024 helping homeowners and new buyers, alike.