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Working Out What You Can Afford – What Can the Average First Time Buyer Buy?

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Working Out What You Can Afford – What Can the Average First Time Buyer Buy?
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All homeowners remember the first time they got onto the property ladder. It is a significant moment in anyone’s life, if they ever achieve it – but the affordability of doing so has changed over the years.

Several decades ago, it was far more common for young people to purchase their first property in their late teens or 20s. In relation to salaries, property prices were more affordable back then, and this meant that the average age of a first time buyer was younger than they are today.

According to USwitch, the average age of a first time buyer in the UK is 33. Meanwhile, according to the Independent, the average age in 1960 was just 23. It is therefore important that adults and parents adapt their expectations for what a first time buyer can achieve in 2023.

So, what exactly can the average first time buyer purchase? If you want to work out what you can afford, then read our blog below for a guide on what your expectations should be.

What is the average first time buyer house price?

It probably won’t surprise you that the average first time buyer house price varies significantly across the UK. In general, London is considered the most expensive place to buy a property – whereas towns in the North-West and North-East are typically more affordable.

According to Money.co.uk the average first time buyer house price in London is £466,660. In contrast, the average price in the North-East of England is £138,834. This demonstrates the huge variation in prices, depending on the region you are in.

The same organisation states that the average price throughout the entirety of the UK is £245,522 for a first time buyer.

How many people are buying properties for the first time?

Data from Money.co.uk found that the number of first time buyers decreased between 2021 and 2022. In 2021, there were 405,320 people who purchased a property for the first time – but in 2022, this number decreased to 362,461. It is not yet clear whether this figure will increase or decrease in 2023 because the year has not finished yet – but it seems that the number of first time buyers is on the decline, which reflects the increasing average age.

Does everyone buy a property eventually?

No, not everyone manages to purchase a property eventually. Some people never raise enough funds to do so, perhaps due to their occupation or family circumstances. Other people wish to live in an expensive area (for example, Central London) and this becomes an obstacle. Thirdly, there are some people who are not attracted to the proposition of owning a property, even if they were able to do so, and they therefore voluntarily choose to rent for their entire life.

What is the average property price for a first time buyer in Scotland?

Figures from gov.uk state that the average first time buyer price in Scotland is £149,548. This is the second most inexpensive region in the whole of Britain, bested only by the North-East of England. Scotland is also noticeably cheaper than Wales when buying a house for the first time.

What is the average property price for a first time buyer in Wales?

Figures from gov.uk state that the average first time buyer price in Wales is £192,017. This is more expensive than multiple regions in Britain, including the North-West, Yorkshire & Humber, Scotland and the North-East. However, Wales is also less expensive than six other regions in Britain.

How do I know how much I can afford as a first time buyer?

The amount that you can afford as a first time buyer depends on several different factors, including your salary, your deposit size, your credit score, and more.

Most mortgage lenders look for a 10% deposit from a first time buyer in order to grant them a mortgage, although it is possible to secure a mortgage with less. However, your salary will be multiplied by the lender so they can calculate how much they are willing to lend you – and therefore, the higher your salary is, the more you will be able to borrow.

It is extremely common in the UK for first time buyers to purchase a property with someone else, because this increases the affordability of doing so. For example, when you have two salaries combined together, it increases the amount that a bank will lend you significantly, and this may enable you to afford a property when you would otherwise be unable to do so.

Your credit score will also have an impact on the house you can afford. For example, if you still have unpaid debts, then this will count against you when a lender looks at your financial record.

You should contact a mortgage advisor or a lender if you want specific advice on what is possible with your current circumstances. Most well-known high street lenders have the same requirements for giving out a mortgage, but the criteria can vary slightly for the smaller banks.

Shall I ask my parents for financial support?

Asking your parents for financial support, when seeking to buy a house for the first time, is a subject area which lots of people have varying opinions on.

If your parents can afford to give you assistance, then this is a fortunate position to be in – but some young people feel uncomfortable asking for support even in this situation. However, it may be challenging to afford a house purchase without it, depending on where you are looking to move to, the market conditions, and the size of the property.

If you feel comfortable doing so, you may choose to have an open conversation with your parents about what is or isn’t possible. But not all parents have the ability to do so, and some may not wish to even if they can. Make sure you approach this contentious area with caution and aim for a mature conversation which doesn’t upset others.

We Buy Any Home can provide you with guidance on first time buyer benefits if you wish to find out more. Meanwhile, to sell your flat fast, contact us today.

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