First-time buyer numbers drop by a third in 20 yearsFind out how to buy a home with a small deposit

17 August 2016

First-time buyers

You can buy a home with a 5% deposit using Help to Buy

With first-time buyer numbers dropping by more than a third over the last 20 years, getting on to the property ladder might seem like a daunting task. It's not all bad news, however.

New data from the English Housing Survey shows that first-time buyers are not only decreasing in number but getting older - though perhaps not at the rate you might expect. Over the last 20 years, the average age of a first-time buyer has increased from 30 to 33. 

Find out what else the survey revealed, plus how you can buy your first home in today's tough market. 

  • For advice on property deposits and getting accepted for a mortgage, call the impartial team at Which? Mortgage Advisers on 0808 252 7987

English Housing Survey: key findings

The English Housing Survey is an annual survey of a random selection of households in England. It covers everything from the private rented sector to properties for older people. The results of the 2014-15 have just been released, with 13,174 households having taken part.

The average age of a first-time buyer has risen from 30 to 33 since 1994/5

The findings show that the number of first-time buyers decreased from 857,000 in 1994-95 to just 564,000 in 2014-15, with the biggest drop occurring in the last 10 years.

This change can be explained in part by the recession, tougher mortgage lending criteria and national housing shortage. While the government claims there are thousands of new homes for first-time buyers in the pipeline, it seems unlikely the number of buyers will reach the heights of 20 years ago any time soon.

There's been a shift in the type of people buying their first home, too. The proportion of homes being bought by just one person halved over the last 20 years to just 14%, underlining the difficulties faced by buyers with one income. Couples, meanwhile, accounted for 80% of first-time buyer purchases, up from 63% in 1994-95.

But despite the dramatic fall in first-time buyer numbers and difficult buying climate, the average age for getting onto the property ladder has risen by just 10% in 20 years, from 30 to 33.

Find out more: am I ready to be a first-time buyer? - The key questions to ask yourself before jumping in


First-time buyers and the bank of mum and dad


With house prices rising sharply compared to incomes in recent years and mortgage providers applying stricter criteria when deciding whether to lend, it's no surprise that more than half of first-time buyers get help towards their deposits.


Data from the 2015 Which? national house moving survey shows that 52% of first-time buyers benefited from financial help from family members.


Our survey also showed that more than half of first-time buyers had a deposit of 10%, although the overall average first-time buyer deposit was 17%. 

Find out more: how parents can help first-time buyers - learn about the ways your family could help you buy a home


Home ownership schemes for first-time buyers


While it's easier to get a mortgage with a bigger deposit, it's not the end of the world if you have a smaller amount saved up. The table below details a range of schemes designed to help you buy your first home. Click the links for more information.

First-time buyer schemes
SchemeHow it works
Help to Buy equity loanIf you've saved up a 5% deposit the government will loan you 20%, meaning you only have to take out a 75% mortgage. The loan from the government is interest-free for the first five years. The scheme is available on new-build properties priced below £400,000, or £600,000 in London. Buyers in the capital can also take advantage of London Help to Buy, which offers equity loans on up to 40% of the value of the home.
Help to Buy mortgage guaranteeThe government provides lenders with a guarantee on mortgages, allowing first-time buyers access to better deals. Unlike Help to Buy equity loans, mortgage guarantees are available on new-build and existing homes, but you'll need to be quick as the scheme is due to close on 31 December 2016.
Shared ownershipShared ownership schemes allow you to buy a stake of between 25% and 75% of a property owned by a housing association and pay rent on the remainder. You can also buy additional shares in your property (known as staircasing) over time.
Starter Homes InitiativeThe government plans to offer first-time buyers discounts of 20% when they buy a new-build starter home. We don't yet know exactly where these homes will be located or when the first batch will be completed.
Help to Buy IsaIf you save for your deposit in a Help to Buy Isa, the government will top up your savings by 25% (up to a maximum bonus of £3,000) when you buy your first home.
Lifetime IsaThe Lifetime Isa will be launched in April 2017 and will work similarly to the Help to Buy Isa, but with higher deposit limits.


Applying for a mortgage: where to find advice


Whether you use one of the schemes above or take a more traditional route into home ownership, you'll almost certainly need a mortgage to help fund your purchase.


Mortgages can be confusing and it's hard knowing how to compare deals, let alone which lenders will accept you if you apply. That's why we recommend talking to a mortgage adviser, who will be able to offer tailored advice on your next steps and guide you through the home-buying process.


Before choosing someone, check out our two-minute video on the key questions to ask your mortgage broker.


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