First-time buyers are purchasing property at an average of £244,100 are saving £20,300, or 8%, below the local market average – rising to savings of £137,800 (26%) in London, according to Zoopla.
Analysing exclusive, up-to date data on thousands of first-time buyers, Zoopla also found that this is despite first-time buyers purchasing a property at an increase of £2,800 (1.2%) compared to a year ago.
In spite of increased mortgage rates, being a first-time buyer can bring savings – particularly in certain regions around the UK. This is most evident in areas that saw the largest value boosts during the pandemic, such as the South West.
For example, Zoopla analysis shows that the typical discount being sought by a first-time buyer in Truro in Cornwall and Dorchester in Dorset is 39% below the local market average: the UK’s largest discount for first-time buyers.
|
Region |
FTB house price (£) |
Price of all homes (£) |
Price difference (£) |
% discount |
|
London |
399,000 |
536,800 |
137,800 |
-26% |
|
South East |
321,400 |
386,400 |
65,000 |
-17% |
|
East of England |
316,700 |
337,700 |
21,000 |
-6% |
|
South West |
241,500 |
313,700 |
72,200 |
-23% |
|
East Midlands |
211,300 |
228,400 |
17,100 |
-7% |
|
West Midlands |
196,800 |
229,300 |
32,500 |
-14% |
|
Wales |
174,700 |
203,300 |
28,600 |
-14% |
|
North West |
164,100 |
194,800 |
30,700 |
-16% |
|
Scotland |
161,400 |
162,100 |
700 |
0% |
|
Yorkshire & the Humber |
153,800 |
185,900 |
32,100 |
-17% |
|
North East |
117,900 |
140,800 |
22,900 |
-16% |
|
UK |
244,100 |
264,400 |
20,300 |
-8% |
Once FTBs have purchased their first home, hikes in mortgage rates throughout 2023 meant that the average first-time buyer is paying mortgage bills that are 27% – or £223pcm – higher than if they’d purchased their home in Q4 2022. The average £990pcm figure is still lower than the UK average rent of £1,221pcm proving that deposits remain a barrier to entry for many would-be buyers.
|
Buying as a FTB |
|||
|
Q4 2022 (£) |
Q4 2023 (£) |
% change |
|
|
Avg FTB price on Zoopla |
241,300 |
244,100 |
+1.2 |
|
Avg FTB deposit |
56,000 |
59,300 |
+5.9 |
|
Avg FTB mortgage size |
185,300 |
184,800 |
-0.3% |
|
Avg monthly mortgage payment* |
777 |
990 |
+27.4% |
Source: Zoopla Research calculations based on the average price of a FTB property, average LTV and FTB mortgage rate from UKFinance.
Traditionally, many FTBs would look for a smaller home in order to get on to the property ladder with a view to upsizing in future. This has been the case in London, where 66% of first-time buyers are enquiring about flats, up from 63% a year ago. Similarly, Scottish FTBs are also now more interested in flats compared to 2022.
However, the average age of a first-time buyer in the UK is 33, which means many may be buying with family needs in mind.
Izabella Lubowiecka, senior property researcher at Zoopla, said: “We expect more first-time buyers to come to market in 2024, particularly in the second half of the year thanks to a combination of reduced mortgage rates, earnings growth and improved affordability.
“But the reality is that many would-be buyers might be able to get on the ladder now by considering different property types or alternative locations that offer better value for money. First-time buyers are in a stronger position in the current buyer’s market so we encourage them to be resourceful and assess all the options available to them.”
