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Barclays First Time Buyer Index Affirms Optimistic Market For First Home Purchases

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  • First time buyers paid an average property price of £281,900 in 2021, down from £294,500 in 2020 – but 13 per cent higher than the average pre-pandemic price
  • Most start saving for their first property at the age of 24, whilst average age at completion is 32
  • Almost three quarters (73 per cent) wish they’d started saving sooner and 64 per cent worry they will never be able to afford to get on the property ladder
  • More than half (56 per cent) of first time buyers are reliant on family support

The number of first time buyers has doubled over the past year, with 2021 volumes up 98 per cent on 2020, according to proprietary data¹ released today in Barclays Mortgages’ First Time Buyer Index.

The Index combines Barclays’ own data with consumer research², polling over 2,000 potential or existing first time buyers to build a comprehensive picture of the UK’s first time buyer market.

First time buyers who got on the property ladder in 2021 paid an average £281,900, which represented a drop from the average price paid in 2020 (£294,500) but a rise from pre-pandemic levels recorded in 2019 (£249,700), according to Barclays own data.

The data also shows that the average income of a first time buyer (buying solo) has risen from £45,900 in 2019 to £50,300 in 2020, and to £50,800 in 2021.

The average total income of joint first time buyers has risen from £63,800 in 2019 to £72,200 in 2020, and to £70,500 in 2021.

Additionally, over half of those surveyed (56 per cent) said they wouldn’t have been able to get on the property ladder without family support.

Raising the deposit

Barclays’ data shows the average deposit paid by a sole first time buyer in 2021 was £61,100, a figure which fell significantly from £71,400 in 2020. For joint buyers, the average deposit was £61,000 in 2021 which decreased slightly from £63,800 in 2020. Survey respondents cited the struggle to save for a deposit as the single biggest obstacle to home ownership (35 per cent).

According to the research, the average first time buyer starts saving at the age of 24, with Barclays proprietary data revealing that the average age at completion is 32, which has remained static for the past three years. Almost three quarters (73 per cent) of those surveyed said that they wish they had started saving for their deposit even sooner.

Many first time buyers are reliant on other methods of financial support in order to raise the required deposit for their starter home. While personal savings remains the primary method of raising funds (62 per cent), over half of those surveyed (56 per cent) said they wouldn’t have been able to get on the property ladder without family support.

Claire Macphail, Mortgage Expert at Barclays, said: "It’s encouraging to see that first time buyers have been able to get onto the property ladder in increasing numbers since the start of the pandemic. However, despite numbers nearly doubling across the last year, it’s worrying to hear that many still believe that they’ll never be able to afford their first property.”

“Our index points to the importance of first time buyers being supported by family so it’s essential for lenders to innovate to provide new ways in which first time buyers can get a head start. Barclays, for example, offers different mortgage options for first time buyers, including the Family Springboard mortgage, which allows family or friends to provide 10% of your property price as security, which they’ll then have returned with interest.

The knowledge barrier

Over half (55 per cent) of budding or existing first time buyers confess they don’t know how to go about the process of buying their first property.

When asked about their level of awareness around additional costs, 39 per cent said they didn’t know they would need to factor in solicitors’ fees, while over half (54 per cent) were unaware that they might need to pay stamp duty, if not otherwise exempt.

The stark reality of the time, effort and finances involved in purchasing a property has caused high levels of despondency amongst potential first time buyers. Almost two thirds (64 per cent) of those looking to buy their first home believe they will never get on the property ladder.

However, first time buyer Perveen Gill, who purchased a two-bed flat in Woolwich with her partner in June 2021, after saving for 7 years for a deposit, offers words of encouragement:

Buying as a couple can be quite a high pressure situation and it's understandable why many are nervous when buying with a partner. But, in my experience, the planning and stress of it all really is worth it in the end! My advice is to focus on saving in a sustainable way that fits both your needs, so you find a balance between short-term enjoyment and longer-term investment; educate yourself on the process so you go into situations informed; and understand where you have power to negotiate so you can save some cash!"

Barclays offers a range of mortgage products to help first time buyers get on the property ladder, including help to buy, shared ownership and the Family Springboard Mortgage. For more information, head to the Barclays Mortgages website.

Source : Barclays

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14 March 2022

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