A Halifax study highlights the growing trend of joint property purchases among first-time buyers in the UK, as escalating prices and mortgage rates push homeownership out of reach for individuals.
A study by Halifax has revealed a trend where nearly two-thirds of first-time home buyers in the UK are purchasing property jointly due to the escalating difficulty of buying a home solo. The research, which looked at the current state of the housing market, has shown that mortgage rates have risen, and average house prices are continuing an upward trajectory, making it tougher for individuals to afford properties on their own.
Particularly, the challenge is more pronounced in London, where eight out of the ten least affordable areas for first-time buyers can be found. These areas have a house price to earnings ratio of up to 10.6. Flats have emerged as the preferred option among first-time buyers in the capital, comprising 73% of their purchases in 2023.
Despite a dip in the number of first-time buyers in 2023, which represented over half of all mortgage buyers, the consensus is that the majority need to co-buy to afford a foot on the property ladder. Kim Kinnaird, director of Halifax Mortgages, has observed that joint purchases are becoming a necessity in homeownership for first-time buyers.
The challenges of saving for a deposit continue to be a concern, even though there has been a slight decrease in house prices in 2023, potentially offering some respite. Experts suggest that more government assistance may be forthcoming for first-time buyers, underlining the significance of housing as a political issue.
Halifax’s study further indicates a rise in joint mortgages for first-time buyers, with 63% of such mortgages in 2023 taken out in joint names. The affordability gap is reflected in the fact that the average property value for first-time buyers is approximately 6.7 times the typical UK salary.
In 2023, the average deposit for first-time buyers was £53,414, while the average house price was £288,136. Terraced homes were favoured by 30% of new mortgages for first-time buyers, closely followed by semi-detached homes at 29%, and flats at 27%.
Regionally, Inverclyde in Scotland was noted as the most affordable location, with property prices about 2.6 times the average salary. Contrastingly, Islington in London stood out as the least affordable place for first-time homeowners, with property values at 10.6 times the average salary.
The findings from Halifax underscore the ongoing obstacles that first-time buyers face when entering the UK property market, with joint mortgages increasingly becoming a strategy to manage these challenges.
