34 and still saving: why first-time buyers are getting older

Buying your first home used to be something people did in their late twenties. If you had a substantial income and a degree, maybe even earlier. Not any more.

First-time buyers’ average age in England has risen from 32 just before the pandemic to 34 today. That’s according to the latest English Housing Survey. In London, the average is even higher, at 35.

Zoom out further, and the shift is even more striking. Skipton Building Society’s home affordability index found that a first-time buyer’s average age has risen from 29 to 34 since 1994. That’s a big shift in just over a generation. And the data suggests the trend is still moving in the same direction.

Why is it taking so long to get on the property ladder?

The causes of belated entry onto the property ladder are well documented, if no less frustrating for it. House prices have outpaced wage growth for the better part of thirty years. That imbalance has compounded other barriers to saving a deposit, including:

The rental market now absorbs a larger share of household income than at any point in recent memory. Private renters now spend 39% of their income on the roof over their heads, compared with 19% for mortgage holders. Saving for a deposit while paying crippling rent is, for many, akin to running on a hamster wheel.

A first-time buyer‘s average deposit now stands at £36,500. Over half of first-time buyers—59%—paid a deposit of less than 20%. 16% paid less than 10%.

Buying alone has also become significantly harder. 52% of today’s first-time buyers need two or more full-time salaries to purchase a home. In the mid-90s, only 40% of mortgages were in joint names.

Just 6% of first-time buyers are now under 25. Thirty years ago, that same group accounted for 23%. That’s a drop of younger homeowners by almost three-quarters.

Geography plays a role, too. Research from My Home Move Conveyancing analysed more than 39,000 transactions. It found that the South East has seen the largest regional increase in first-time buyer age, rising by three years. The East Midlands, by contrast, has remained relatively stable. Cities such as Leicester, Derby, and Nottingham continue to offer more accessible entry points.

The case for waiting a little longer

Here’s the counterintuitive part of this picture. Buying later in life is rarely a choice savers freely make. But, if your circumstances allow, there’s a genuine financial argument for taking longer to build a larger deposit.

A bigger deposit changes your mortgage in three meaningful ways:

First, a larger deposit reduces the loan-to-value ratio your lender will ultimately use. How much you can put down directly affects the interest rate a lender will offer.

Lenders price risk. An underwriter will see a borrower with 25% or 30% deposit as a lower risk than one with 5% or 10%. The difference in rate between a 95% LTV mortgage and a 75% LTV mortgage can be substantial. And that difference only compounds over a 25- or 30-year term.

Second, the more you can save for a deposit, the less the total amount you’re borrowing. In real terms, you’ll pay less interest over the life of the mortgage (even before factoring in the rate advantage).

Third, a bigger deposit gives you a larger equity cushion from day one. Owning more of your property matters if property values move against you in the early years of ownership. The more of your home you own, the less likely it is to fall into negative equity.

In addition, almost two-thirds of first-time buyers—62%—re now taking mortgages with 30-year repayment terms. Longer terms reduce monthly payment amounts, but significantly increase the total interest you’ll pay. A larger deposit, even one that takes an extra year or two to accumulate, can shorten that term. The net effect will reduce the overall cost of borrowing over the mortgage term.

None of the points we’ve raised here constitutes an argument for waiting to buy indefinitely. Property values, in general, tend to rise over time. So the cost of renting while saving is all-too real. But for buyers close to a meaningful deposit threshold, the result of holding out a little longer is often worth running. Even moving from 10% to 15%, or from 15% to 20%, can reap significant financial rewards.

What finding a bigger deposit means in practice

The single most useful thing a first-time buyer can do is understand exactly where they stand on the LTV spectrum. Once you’ve got a good handle on that, work out what crossing the next threshold would mean for your rate.

One of our experienced brokers can quickly run those numbers for you. Their answer might be enough to change your mind and your timeline.

We work with first-time buyers across all income structures. Whether you’re employed, self-employed, contracting, or somewhere in between, we can help you understand:

• How much you may be able to borrow
• What deposit level will make the biggest difference to your rate, and
• Which lenders are most likely to assess your income fairly.

If buying your first home is on the horizon, let’s have that conversation.

Author: John Yerou

John Yerou is the owner and founder of the award-winning Mortgage Quest Ltd and its subsidiary brands.

In 2004, John began his career in financial services as an independent mortgage advisor and broker. He's since been instrumental in negotiating bespoke mortgage underwriting criteria for professional contractors with many high street lenders.

As such, John's one of the most respected and recognisable names in securing mortgages for the UK's flexible workforce, incorporating independent professionals and the self-employed.

His recognition as the go-to mortgage expert has grown exponentially, reflected in citations and his own publications in both national and contractor-oriented press.

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