02 The question of how to handle First Time Buyers (FTBs) seems to have been a perennial problem in the housing market, and today it seems to be heading into extreme territory where the empirical and anecdotal evidence of how difficult it is to make that first step onto the housing ladder is reaching new highs, or rather, new lows. We all know and realise that without a fully functioning FTB market the rest of the housing market can’t really exist, it is the foundation and fulcrum for the overall market, allowing people to move up the housing ranks as people look to move within their life cycle. Richard Howes Director of Mortgages However, the number of FTBs who bought a home with a mortgage fell to its lowest level in a decade in 2023, according to a leading Lender. Figures, from the Yorkshire Building Society, are the latest evidence that housing affordability has been stretched to the limit by rising mortgage interest rates and high house prices. As covered by The Guardian, they calculated that across the UK there were an estimated 290,000 FTBs in 2023 . Down by a fifth compared with 2022, when the number reached 370,000, and the lowest since 2013, when the total was 260,000 . Whilst the average cost of a home for a FTB fell 5%, from a peak of £302,008 in 2022 to £288,136 , the research showed that borrowers were finding it harder to meet Lenders’ affordability requirements. Nevertheless, figures for Q1 2024 suggest this sector is fighting back. Mortgage Strategy recently showed that: CACI data indicates that the value of applications by FTBs in Q1 was the highest since 2022, according to analysis by First Direct. Application volumes reached £24.2bn for Q1, up by 37% from the same period last year. INTRODUCTION [1] The Guardian - Number of UK first-time buyers in 2023 was lowest in a decade www.theguardian.com/money/2024/jan/02/uk-first-time-buyers2023-interest-rates-house-prices [2] Halifax – Press Release: Almost two thirds of first-time buyers teaming up to get on property ladder www.lloydsbankinggroup.com/assets/pdfs/media/press-releases/2024-press-releases/halifax/2024.01.30-almost-two-thirds-of-first-time-buyers-teaming-up.pdf 1 2 2
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