- By Lora Jones
- Business reporter, BBC News
Image source, Getty Images
Nearly two-thirds of first-time buyers are teaming up to get on the property ladder, according to new research.
Some 63% of first-time buyer mortgages taken out between January and December 2023 were in joint names with two or more people, Halifax found.
Buyers are facing serious pressure trying to save for a deposit while rent and living costs are high, it said.
The analysis looked at the bank’s own data and data from Lloyds Bank and Bank of Scotland, part of the same group.
Separately on Wednesday, new figures from the Nationwide showed that the average UK house price increased by 0.7% month-on-month in January as the outlook for the property market looked a “little more positive”.
However prices are still 0.2% lower than a year ago.
The Lloyds Banking Group was the UK’s biggest mortgage lender in 2022, according to figures from the trade association UK Finance.
The proportion of joint mortgage completions has seen a small increase, now making up 63% of those for first-time buyers, compared with 58% in 2021.
The Halifax suggested it was “unsurprising” that the majority of first-time buyer applications were joint, given the increase in the upfront deposit required over the last decade.
According to the new data issued on Wednesday, first-time buyers put down an average deposit of £53,414 last year – about £21,000 more than a decade earlier.
Across the UK, however, the average first-time buyer house price in 2023 was £288,136, slightly down from £302,008 in 2022.
Kim Kinnaird, director of Halifax Mortgages, said: “The overall fall in house prices we saw in 2023 will go some way to helping people get on the ladder for the first time – but these buyers are still dependent on a steady supply of properties in their price range, while they are faced with the continued pressure of saving for a deposit, when rent and living costs are high.”
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The research also showed that terraced homes made up 30% of new mortgages for first-time buyers, although flats have been increasing in popularity as a cheaper starter home option.
The average first-time buyer in the UK is now 32-years-old, it said.
Separately, the Nationwide said on Wednesday that there had been a shift among investors over the direction Bank of England interest rates were likely to move, which would help ease borrowing costs for buyers.
Nationwide’s chief economist, Robert Gardner, said: “There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down.
Mortgage rates hit record highs in 2023 as the Bank of England raised interest rates in an attempt to rein in rising prices.
In theory, by making borrowing more expensive and dissuading people from taking out loans, such moves cool down the economy, easing pressures pushing up prices.
But the higher interest rates also led some landlords to increase rents and made homebuying more expensive, exacerbating what has been described as a cost-of-living crisis.
The latest figures from the financial information service Moneyfacts show that the average rate on a two-year fixed deal has dropped to 5.56%, compared with 5.93% at the start of the year.
While monthly data on house prices can be volatile, some analysts said that the figures from Nationwide would start to encourage potential buyers to feel more confident they can make their next move.
Nathan Emerson, the chief executive of Propertymark, said: “If the Bank of England decide to bring down interest rates too, this should give sellers even more confidence and ease the pressure on affordability.”
The Bank is due to make its next decision on interest rates on Thursday.
