Is the homeownership dream over for young people? Here’s how old the average first-time buyer really is

It took an hour but the housing crisis finally showed up at the first televised general election debate between Rishi Sunak and Keir Starmer, when the prime minister candidates were asked if young people should give up on becoming a first-time buyer.

On Tuesday (4 June), ITV presenter Julie Etchingham told Sunak and Starmer that the most common living arrangement for 18 to 34 year olds is living with their parents. She asked a question from audience member Miles: “Do the young need to change their expectations of homeownership now?”

Sunak agreed it is “too hard to own your own home” and said the government had built one million homes during this parliament.

The prime minister said that he wants to make it easier for young people to save for a deposit, arguing that “taxing you more makes it even harder to get on the property ladder”. He also accused Labour of planning to “concrete over the countryside”.

Starmer said the dream of owning a home had “all but gone” for young people and said that people waiting until their late-30s to get on the property ladder was “shocking”. He vowed to build 1.5 million homes while Labour is in government but said “picking a number requires a plan” – no doubt in reference to the Tories’ failure to hit its target of building 300,000 homes per year.

The Labour leader said he would have to change planning laws and give mayors and local leaders the powers they need to build homes and surrounding amenities.

“We’ve got a clear plan to deliver on the homes,” said Starmer.

How old are first-time buyers in the UK?

New research from Mojo Mortgages found the average of a first-time buyer in the UK is 33 years and eight months.

That’s not the case for every part of the UK. People in Wales buy their first home at the age of 31 on average while first-time buyers in London have to wait until the age of 36 years and eight months.

Average house prices in the UK were 283,000 as of March this year according to the Office for National Statistics (ONS).

Saving up for a deposit can be difficult for first-time buyers, particularly if they are paying record-high rents while trying to put cash in the bank.

That’s why Etchingham cited the number of people living with their parents to cut down on costs in her question to Starmer and Sunak.

The 2021 census in England and Wales showed the total number of adult children living with their parents rose 14.7% in the decade since the 2011 Census.

Just short of five million adult children were in that situation, up from 4.2 million 10 years earlier.

That is partly down to the cost of a deposit for a house.

The research from Mojo Mortgages found first-time buyers in London need to find a mammoth £108,848 on average for a deposit.

That’s three times as much as in the North East where first-time buyers pay £29,740 on average but that deposit remains only a few thousand pounds short of the average salary across the UK.

Full-time employees in England could expect to pay around 8.3 times their salary when buying a home, according to the ONS. In Wales it is 6.1 times annual earnings.

John Fraser-Tucker, head of mortgages at Mojo Mortgages said: “These figures highlight several financial challenges that first-time buyers in 2024 are facing. 

“Firstly, a combination of stagnant wages and the cost of living crisis has made it harder for buyers to save a deposit due to a lack of disposable income. Higher living expenses, including rent, utilities, and daily costs, make it increasingly difficult to set aside money for a deposit. These obstacles collectively push the average age of a first-time buyer higher, delaying the dream of homeownership for many.”

Rising mortgage rates are also a barrier for young first-time buyers even if they can scrape together a deposit.

Mortgage rates have surged due to the impact of Liz Truss and Kwasi Kwarteng’s disastrous mini-Budget in 2022 and the Bank of England’s strategy of raising interest rates to combat inflation.

The average five-year fixed rate rate for 85% loan-to-value mortgages – requiring a 15% deposit – is now 5.02% down from 5.1% a year ago, according to Rightmove.

The property site said that would mean the average mortgage payment for a first-time buyer property is now £1,135 per month.

Matt Smith, Rightmove’s mortgage expert, said a review of mortgage affordability criteria could help young first-time buyers.

“There’s an opportunity to unlock greater affordability in a responsible way, which could help more first-time buyers get on the ladder,” said Smith.

“First-time buyers are already taking out longer mortgage terms and lender innovation has included the introduction of longer-term fixed rates that are likely to be part of the solution as they help by ensuring certainty of payments. Various mortgage schemes have played their part and supported a number of people, and we know from our research that people would like to see new schemes introduced, but we think longer-term solutions would be more effective than short-term schemes.

“Either way, it’s most likely that regulatory change is needed, so it’s critical that the government works with regulators and lenders from day one on any mortgage solutions, to ensure buy in and take up, which will in turn create more options for first-time buyers.”

Big Issue is demanding an end to extreme poverty. Will you ask your MP to join us?

The Big Issue’s Blueprint for Change is calling for more affordable social housing to be built to help people out of poverty.

Building more social rent homes is widely accepted as vital to tackling the housing crisis by offering people more affordable rents and easing the demand for private rented homes which have seen rents hit record highs in recent times. 

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