Buying your First Home

Low-deposit mortgages are on offer (as low as a 1% deposit), but with a strict borrowing criteria. Whilst these deals can be pulled as swiftly as they materialise, it does show a degree of intent for First-Time Buyers.

In addition to this, and alongside the support from government schemes (such as Freedom to Buy), there is also real, and immediate, help from some of the parents (and grandparents) of those looking to get onto the property ladder.

Plus, there’s a pragmatic approach being taken by first-time buyers, where two (or more) people are clubbing together to obtain their first home. According to Halifax*, this represented almost two-thirds of all first-time buyer mortgage completions in 2023.

Moving on from renting

Whilst there are positives to renting – such as the flexibility to test out an area (or relationship), and fewer financial questions to answer/justify – for many, it’s seen as ‘dead money’. This is because you’re not building up, nor benefiting from investing money, time and effort into your own property. Additionally, the rental payments might even be higher than the expected mortgage costs.

Providing a deposit

This is one of the biggest stumbling blocks. In 2023, the average deposit was £53,414, equating to around 18.5% of the purchase price. And that’s in an environment, where the average cost of a home for a first-time buyer fell almost 5% from the 2022 peak.

This percentage deposit will obviously open up the buyer to better rates than those who are looking at deals at around a 5% deposit. Of course, to save up the average deposit percentage takes time, meaning it’s no surprise that the average age of a first-time buyer is around 32 – and that’s broadly reflective for all of the UK.

However, despite the deposit (and affordability) hurdles to overcome, the first-time buyer still represented 53% of all home purchase loans in 2023.
(Source: *Halifax, First-Time Buyer report, January 2024)

Bank of Mum & Dad

We recognise that for a sizeable number it’s not going to be an option, but for those who can help, this is what 2023 brought about:
– 318,400 property purchases were supported by the Bank of Mum & Dad.
– The average gift (or loan) was over £25,000, equating to £8.1bn of support, in total.
– And this resulted in over half of under 35s, who recently bought a home, receiving financial help.
(Source: L&G, 2023 Bank of Mum and Dad research, November 2023 release)

Within this mix there’s also the support from the Grandparents. They too may delve into their savings & investments (or even access their property wealth) in order to see their grandchildren benefit within their lifetime, and possibly when financial support is most needed.

Talk to us

As for us, we can assist with your application, factor in any financial support from parents (or grandparents), and assess how you stand on meeting the lender’s affordability criteria – which varies amongst the lenders.

We’d also consider the various schemes on offer from the government, and balance that against the alternatives out there in the general marketplace.

If this route is of interest for you (or a family member), then please get in touch to find out more.

Your home may be repossessed if you do not keep up repayments on your mortgage.