Broker identifies why an increasing number of people choose to buy their first home later in life
The number of first-time buyers aged 50 and older has significantly increased in recent years, data analysis from mortgage broker Tembo has shown.
The family mortgage specialist reported that there were around 12,000 first-time buyers over the age of 50 in the UK in 2022 and that this number has increased by 30% over the past five years, making it one of the fastest growing segments of the first-time buyer market.
Meanwhile, according to the Financial Conduct Authority’s product sales data, the number of younger first-time buyers, particularly those under 30, has been dwindling, while the group of older first-time buyers aged over 40 has been steadily increasing by over 7% annually since 2018.
Regional analysis revealed a considerable discrepancy in the prevalence of first-time buyers aged over 50 across the UK. London exhibits the lowest proportion, with 2.4% of first-time buyers falling into this age bracket, while the South West boasts the highest at 3.5%. Despite its lower current proportion, London is experiencing the most rapid growth in this demographic, with a 64% increase in over-50 first-time buyers from 2018 to 2022.
In Scotland and the West Midlands, although the total number of first-time buyers declined from 2018 to 2022, there was a notable rise in first-time buyers over the age of 51, with an 8% increase in Scotland and a 22% increase in the West Midlands. Across all UK regions, the growth in over-50 first-time buyers has surpassed the growth in total first-time buyers.
Projections by Tembo suggest that by 2030, based on current growth trends, individuals over 40 years old will constitute a quarter of all first-time buyer transactions, totalling 89,000 buyers. Additionally, the number of first-time buyers aged over 50 is anticipated to rise from 12,000 in 2022 to 19,000 by 2030, comprising 5% of all first-time buyers.
Why are first-time buyers buying later?
Tembo has identified four key factors driving the trend of purchasing first homes later in life, namely extended duration for saving deposits; escalating housing affordability challenges; dependence on support from schemes like Help to Buy, shared ownership, or family and friends; and the increasing availability of mortgages extending into retirement.
“A perfect storm of factors impacting first-time buyer affordability means we’re now seeing a sharp rise in the number of people waiting until they’re aged 50 or over before they buy their first home,” Richard Dana (pictured), founder and chief executive at Tembo, commented. “This is presenting a challenge to both the financial services industry and would-be home buyers, with many traditional high street lenders not offering extended mortgage loan terms beyond the age of 75.”
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