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First Time Buyers - Opinion for 2024 ?

Journalist: Newsteam, Newsteam

ended 01. December 2023

According to Money Charity Stats November stats report - First-Time Buyers HM Land Registry reports that the average house price for first-time buyers in Great Britain was £242,000 in September 2023, an annual decrease of 0.3% and a monthly change of -0.4%. According to UK Finance, the typical first-time buyer deposit in December 2019 was 23% of the purchase cost, which would average £55,660 in September 2023 based on the above Land Registry first-time buyer price. This is 161.5% of the average UK salary.

  • Is obtaining 23% deposit on today's property prices achievable for many First Time Buyers ?
  • Does the industry need to offer better mortgage deals for 90% to 95% LTV products then what we are seeing today ?
  • What additional government backed schemes could be looked at for 2024 to help with lower deposit buyers ?
  • Should more affordable homes be built and be mandated ?

14 responses from the Newspage community

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Darryl Dhoffer
Founder at The Mortgage Geezer
In today's market, saving up a 23% deposit is like trying to reach the bottom of a bag of chips – it seems endless, and you're constantly grabbing handfuls, but you never quite get there. The property and mortgage landscape for first-time buyers is like a game of musical chairs – there aren't enough seats for everyone, and someone always ends up left standing. For 2024 not sure what schemes could be introduced that may inflate property prices again - but I would imagine for the Spring Statement the Government will have drafted some plausible options including: The government could introduce a "First Home Fairy Godmother" program, where a magical being grants first-time buyers the funds for a deposit.
The government could establish a "Homeownership Hogwarts," where first-time buyers learn the magical spells and potions needed to conjure up a deposit.
The government could create a "Deposit Dragon's Hoard," a vast treasure trove of funds specifically allocated to First Time Buyers.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Let's face it, a 23% deposit is hardly ever achievable without assistance of some kind. It is a huge problem for those looking to get on the property ladder. It is a problem that needs to be tackled head-on, and the only way is innovation and updating of what is available in the market. House builders are hatching plans to tackle this problem and stimulate sales. Mortgage lenders need to crack on with price reductions for those with lower deposits, and schemes like gradual homeownership need to take flight. Government assistance would be welcomed, with a deposit loan of sorts, repaid with interest over say, 10 years allowing some to break free from the high rent - can't save cycle.
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Rohit Kohli
Director at The Mortgage Stop
The bottom line is that we are in a housing crisis and have been for over a decade. The pure and simple fact that is the housing shortage will mean house prices stay high. For first-time buyers, it means waiting longer before they can own their home. It's not just about building houses, it has to be the right type of home - no point granting planning permission for luxury 4 or 5-bed detached homes - this isn't going to help first-time buyers. What we need is a proper housing strategy that mandates the right type of homes are built for the area, but with a constant merry-go-round of housing ministers, this government isn't going to provide that. First-time buyers will need to continue to look at the Bank of Mum and Dad to help and take on mortgages for much longer terms to make the payments affordable.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Obtaining a 23% deposit is more down to help from family, than saving for most first-time buyers. Unless they are living with family rent-free, most after rent and bills simply cannot save much for a deposit. Rates need to come down for those with lower deposits, especially for first-time buyers, but usually, first-time buyers only get a little cash back or a reduced fee. More affordable homes have always been the solution, but government and house builders don't seem to be able to get this done.
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Michelle Lawson
Director at Lawson Financial
I have seen an uptick in first-time buyers looking for property- it is an ideal time with the market as it is to potentially get a deal. We have to be mindful of quoting a 23% deposit as this is very rare and not the norm. As well as the Bank of Mum and Dad, there are many deals with lower deposits as well as mortgages for a variety of assisted options such as Joint Borrower Sole Proprietor and where parents can take a charge on their property. There should definitely be a focus on building more 'affordable' homes such as 1 and 2 bedroomed properties and not mainly executive style homes. Ultimately- speak to a good broker- we have lots of ideas!
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Elliott Culley
Director at Switch Mortgage Finance
To hear the average is over 20% is surprising. Most first time buyers I speak to have a 10% deposit and find it very hard to go much higher than this. Better mortgage rates for buyers with 5-10% deposits are starting to filter through now, however in the recent past they have been left in the dust as lenders try to appeal to borrower's with higher deposits. The fear for lenders is the worry about house prices declining further, and leaving borrowers in a situation with negative equity. However schemes such as the mortgage guarantee scheme are designed to take some of the risk away from lenders, so it would be good to see lenders being more bold in the lower deposit space. After all the first time buyer is the life blood of the market.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
There has never been a better time than now in the last 15 years to invest in property. First Time Buyers are understandably nervous given the volatility in the gilt rates and the increasing BoE rates. However, we believe that the current market opportunity must not be missed by those looking to enter the market, whether it is to buy their first home or to step up from a smaller house. In our view, the current period of uncertainty and depressed house prices will not last much beyond 2024. Yes, you are going to pay more in terms of interest, but one can acquire the same asset at 10-15%, sometimes even 20% below what you would have paid just a year ago. So, of course, as the clouds of high-interest rates start to give way to sunny, breezy rates in 2024 (which we expect around Q2 2024), the demand for properties will only increase. This is inevitable given we are still dealing with an acute housing crisis in this country, something that is here to stay.
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Rowan Frayling
Managing Director at J Finance
The Bank of Mum & Dad, where possible, is likely to continue to boost first time buyers ability to get on the ladder. A 20%+ deposit is rarely achievable without some assistance. The higher loan to value options are there, but with todays interest rates, they represent an expensive option.

Affordable housing typically does not fill the gap and is viewed by many as still being unaffordable, so perhaps the Government could get their thinking caps on and boost lending options for those with smaller deposits or lower incomes.
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Graham Cox
Director at Bridging Hub
Deposit size is the biggest obstacle to increased house purchases amongst first-time buyers. Much lower house prices are the best solution, rather than any of these ridiculous sticking plaster "solutions" like Help to Buy, the Mortgage Guarantee Scheme, shared ownership and so on. But after 13 years, any hopes of this administration doing the right thing and building social housing at scale are long gone. The house builders have the government in their pocket. Just look at how they've watered down the new housing bill going through parliament.
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Austyn Johnson
Founder at Mortgages For Actors
It depends where you buy, if you buy in london, it's likely that 23% is a huge amount of money and not easily found. Yorkshire though, much more likely. Easier application criteria for 90-95% LTV would open doors for clients that can afford a mortgage, but struggle to save. Affordable homes will always be welcomed, it astounds me how much some new builds go for now...
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
The key to helping more people, both first-time buyers and home movers, is containing the rampant house price inflation we see in most areas of the UK. That's going to require a greater supply of the right type of housing, being built in the right areas, to achieve and that's something that only the central government can make happen. It will need a bold and forward-thinking Housing Minister to face up to the builders, the planning system and local authorities to get a meaningful improvement in the situation. Sadly, the role of Housing Minister appears to have been treated as a second-tier post for too many years; both in terms of the weight the brief carries when dealing with other departments, but also in the people put in that post who seem to be moved on far too quickly to have any real chance to bring about any meaningful change.
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James Bull
Mortgage Broker at JB Mortgages
High buy to let mortgage rates for landlords have been pushing up rental payments for some time now. This in itself is making saving up for a deposit difficult for first time buyers, the fact that an average of £55,560 is needed ( plus fees ) means that buying a house is not a realistic goal for many people. I would like to see the government extend the mortgage guarantee scheme to make 100% mortgages open to people who can afford to make the mortgage payments.
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Charles Breen
Founder at C B
Without the bank of mum and dad getting a 23% deposit is totally unobtainable for the vast majority of first time buyers, with inflation busting increases to their rents, and being younger with less assets they have less financial resilience to weather this storm. focused assistance on reducing the rates that are being charged to FTB’s at higher loan to values and changed the planning laws to be more effective in building truly affordable housing rather than help to buy or as it should really have been called help to sell as it only helped builders increase their profits (average profit on a new build went from 35K in 2010 to over 70K today)
In other countries local authorities buy land, zone it for residential, build all the schools, health centres ect, build the affordable homes and then sell the remainder of the development to a developer at a profit which pays for all the work they have done. We just need someone to stop listening to vested interests and just get a cop on!
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
The thing with averages is that they are averages and it's definitely possibly to buy a house with a 5 or 10% deposit. Heck it's even possible with no deposit in some circumstances. This just goes why the first thing any prospective first time buyer should do is to pick up the phone to a proper mortgage broker and work out their options.