Does age matter for a first-time buyer? - Mortgage eligibility

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Does age matter for a first-time buyer?

Does age matter for a first-time buyer?
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    The age of the average first-time buyer has risen significantly over the past decade. Does age matter for first-time buyers and if so, what implications does it have?

    Purchasing your own home is on the life plan for many people in the UK, but it will probably come as no surprise to hear that it’s taking longer and longer for people to afford the home of their dreams. This blog considers if being older makes any difference when it comes to being a first-time buyer.

    What is the average age for first-time buyers?

    The average age of first-time buyers in the UK varies depending on which report you look at but typically falls in the range of 31-34 years old. If you are a first-time buyer in London, then you’ll be waiting until around 33-35 years on average.

    The main driver for the upward trajectory of first-time buyer average age is the high cost of property. Property prices have increased faster than average salaries making it harder to save a sufficient deposit and get high enough multiples.

    Is there an age limit for first-time buyers?

    There is no upper age limit for first-time buyers. However, if you want to get a mortgage, you will need to meet the mortgage lender criteria, which may stipulate an upper age limit of between 65-80, depending on the specific product.

    Factors that may affect the age you become a first-time buyer

    The factors affecting the average age of people getting on the property ladder to buy their first home include:

    • The high cost of property
    • Ability to save a deposit
    • Other debt
    • Average income
    • Longer time spent in education vs. going to work
    • Couples deciding to have a baby before buying a house
    • Other life choices such as going travelling

    Financial consideration

    The first consideration for anyone thinking of getting on the housing ladder is affordability. UK average income at around £642 per week (according to ONS statistics for March 2023) equates to £33,384 per year.

    With many mortgage lenders offering around 4-4.5 x income, most first-time buyers will need a significant house deposit in order to buy their first place. This requirement for a large lump sum to put down increases the age of a first-time buyer.

    Mortgage eligibility

    Lenders have their own set of criteria on which they assess people buying property. To be eligible for a mortgage, you will need to be at least 18 years old.

    In addition, you will need to meet other lender requirements, such as having a deposit, having a certain income, and having a credit history that demonstrates your creditworthiness.

    Lifestyle and family planning

    Your lifestyle aspirations may impact when you are in a position to purchase a new home. First-time homebuyers are much more likely to be waiting until their pay has risen and more likely to put off buying their first home until they are ready to commit to a purchase with someone else.

    In addition, many couples who previously paid rent only become first-time buyers when they have children and require more stability, space, and a place near good-quality schooling. At the other end of the age spectrum, there are more buyers who are in their late 40s and 50s becoming first-time buyers than ever before who have become fed up with renting as costs spiral.

    Market conditions

    When you are considering becoming a homeowner for the first time, it’s a good idea to talk to a broker who understands the current housing market conditions and the UK mortgage market.

    It can be time-consuming and overwhelming to research the different options and assess how market conditions might change over time. A mortgage advisor will be able to advise you on how house prices and mortgage interest rate changes might impact your ability to get on the property ladder in your region.

    Average house price

    In the last three years, average house price inflation has been 22.4%, meaning that the average price of a property in the UK in March 2023 was £232,684 compared with £285,000 in March 2023.

    Over the same period, average earnings increased only 6% from £31,487 (March 2020) to £33,684 (March 2023). This means that irrespective of where in the country you might like to live, property prices are becoming more unaffordable as time passes.

    Emotional readiness

    Finding the perfect home can take time, and with prices high, it’s a big financial commitment to take out a mortgage that you’ll be paying back for many years.

    Most terms are 25-30 years, so it’s vital that you are emotionally ready to manage this long-term agreement with your bank or building society.

    Will my age affect what mortgage I am able to get?

    Your age is likely to impact the mortgage term that is offered to you, as many lenders prefer borrowers to pay back their loans before retirement.

    However, there are options for longer mortgage terms, although you may end up with a higher interest rate.

    Ready to get on the property ladder? Get in touch with us today

    At Simmonds Mortgage Services, we’re all about helping people fulfil their dreams, especially if you are a first-time homebuyer. We’ll help you research the options and find mortgages to suit your budget and circumstances. Call today on 01184 694037 for a no-obligation chat about how we can support you.

    Picture of Andrew Simmonds

    Andrew Simmonds

    Andrew Simmonds is the managing director at Simmonds Mortgage Services. He's been providing mortgage advice to home owners for many years.

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