Three Quarters of First Time Buyers Cannot Afford Homes

A recent survey from a first time buyer property portal suggests that over three quarters, 77% of buyers, believe they cannot afford to purchase homes on the open market.

Completed by over 2,600 prospective purchasers on sharetobuy.com, the survey provides an insight into the property landscape for first time buyers, demonstrating the critical need for affordable homeownership schemes. A significant 76% of respondents felt that buying as a single person on the open market in 2024 is not achievable, while 76% of those surveyed confirmed they are not receiving any financial help from family members to put towards a deposit – battling rising interest levels and inflating house prices alone.

While the average deposit on the open market currently sits at £61,000 according to the survey, 27% of surveyed buyers have saved between just £5,001 and £10,000. Despite this, almost 40% of respondents said they hoped to buy a property within the next six months.

How do you qualify as a first-time buyer?

HMRC states that you “must not, either alone or with others, have previously acquired a major interest in a dwelling or an equivalent interest in land situated anywhere in the world” in order to qualify as a first-time buyer. You are a first-time buyer if you have never owned a piece of real estate.

When applying for a mortgage, what is the minimal deposit?

For example, a 95% mortgage would require a minimum deposit of 5% of the purchase price of the home.

What is the average UK first-time buyer price?

In the United Kingdom (UK), the average property price for first-time homebuyers was 288,000 British pounds in 2023, compared to 302,000 British pounds the previous year. In 2023, most regions had a modest decline.

Does the government help first-time buyers?

A government-backed programme called First Homes aims to assist more first-time homebuyers in getting onto the real estate market. Selected new-build homes in England are offered for sale with a 30% market value reduction, with the maximum price after the discount being £250,000 (£420,000 in London).

Affordable

The survey was conducted by first time buyer property portal Share to Buy, which lists properties available through Shared Ownership and other affordable housing schemes. As Shared Ownership buyers only need to put down a deposit on the share they are purchasing, often between 5% to 10%, whilst paying a subsidised rent on the remainder, Shared Ownership deposits are often considerably lower than those on the open market.

A spokesperson for Share to Buy said: “It is really disappointing that such a high proportion of hopeful first time buyers feel that properties on the open market are wholly inaccessible – with fears that they may be permanently priced out of homeownership. Unless you’re receiving financial help from family, it can be really difficult to put enough money aside to save towards a sky-high house deposit, particularly if you’re already privately renting somewhere.”

“This new data highlights why alternative housing schemes like Shared Ownership are key; allowing buyers to step onto the property ladder at a significantly more affordable level – with deposits for a 25% share of a studio apartment starting from a minimum of £3,781.”

Share to Buy is hosting the next London Home Show on April 13th, an opportunity for those looking to get on the property ladder in London and the Home Counties. This free event in Westminster enables budding buyers to meet with leading housing providers, attend live sessions about available home-buying schemes, and get free financial and legal advice from specialist firms.