First-time buyer mortgages remain almost a decade away for many solo buyers in England, according to new research from reallymoving.
According to the data, a first-time buyer purchasing alone needs to save for 113 months, or 9 years and 5 months, to raise a 10% deposit and cover upfront buying costs, a timeline that has clear implications for how advisers frame savings and product conversations with clients.
To buy a property at the current average first-time buyer purchase price of £250,000, a 10% deposit of £25,000 needs to be saved in addition to £1,421 for conveyancing, £462 for a survey and £432 for removals, bringing the total to £27,315. Putting aside 10% of take-home pay each month, it would take 113 months to cover all upfront costs.
Over the past year, more than half of first-time buyers, 53%, bought a 3-bedroom property or larger, suggesting that, as the average age at which people buy their first home has risen to 34, their needs have shifted to factor in growing families. For advisers, this points to first-time buyer mortgage requirements increasingly resembling those of second-steppers, with larger loan sizes and different affordability profiles to consider from the outset.
Joint applications significantly shorten the savings timeline, a point brokers may want to raise early with clients weighing up their options. Those who can buy with another person, such as a partner, friend or sibling, will see their time to save halved to 56 months, or 4 years and 8 months, based on both earning the national average wage.
Lifetime ISAs also remain a relevant product conversation for advisers ahead of planned reform. The government recently announced plans to replace the Lifetime ISA (LISA) with a new first-time buyer ISA in 2028, with no upper age limit, but until then, anyone between the ages of 18 and 39 can continue to open and save into a Lifetime ISA.
A first-time buyer can save up to £4,000 per year and receive a 25% annual state bonus on top, reducing the time to save by almost two years for those buying alone. For a couple saving into a LISA and benefiting from government top-ups, the time to save falls to 4 years and 9 months.
Regional disparities remain stark and are likely to shape how brokers approach affordability conversations depending on location. First-time buyers in London face saving for 13 years to raise the £47,692 needed to get on the housing ladder, while those in the North East need to save for approximately half that time, 6 years and 7 months, to raise £16,763. On average, first-time buyers in the South of England need to save for 3 years and 4 months longer than those in the North.
Rob Houghton, founder and chief executive officer of reallymoving, said: "Raising a deposit and covering the cost of moving is still the biggest challenge facing most first-time buyers who don't have access to financial support from parents and grandparents."
He added, "With the cost of living and rents so high, putting money aside month after month is increasingly difficult and even first-time buyers who save consistently are looking at almost a decade of saving until they can afford to get on the housing ladder.
"The announcement that a new first-time buyer ISA will be launching in 2028 with no upper age limit is certainly positive, better reflecting the increasing age of first-time buyers and their desire to purchase larger homes at the outset, but it's essential that the £450,000 price cap is also reviewed to ensure it better reflects property values in London and the South East."
