First-time buyers opting for longer mortgages

Posted on Monday, July 13, 2020

Nearly half of first-time buyers – 45% – picked a mortgage product of 30 years or over in 2018 to 2019, shows the latest English housing survey.

Published by the Ministry of Housing, Communities & Local Government, the survey shows that in 2008 to 2009, the proportion of FTBs who opted for a mortgage of this length stood at 33%.

Overall, in 2018 to 2019, 19 per cent of mortgages were 30 years or longer in length and in 2008 to 2009, 7% were.

MHCLG says that this could be indicative of mortgagors adjusting their monthly costs over time – something renters do not have the luxury of doing.

Within London, 11% of FTBs had a mortgage length of 30 years or more in 2008 to 2009, whereas the latest reading stands at 58%.

In terms of deposits, for FTBs the average median amount put down was £25,000 in 2018 to 2019, whereas it was £16,000 in 2008 to 2009.

For previous purchasers the medium deposit stood at £38,500 in 2018 to 2019, up from £22,000 in 2008 to 2009.

As one might expect, the reliance of FTB on family money has also increased – in 2008 to 2009, 22% of FTBs used a family loan or gift to help their purchase. In 2018 to 2019, this had grown to 34%.

The survey also shows that the mean weekly mortgage payment has grown 18% in the last ten years – from £145 in 2008 to 2009 to £172 at its most recent reading.

Meanwhile, the mean private rented sector weekly cost throughout England has moved 31%, from £153 a week to £200 a week within the same time frame.

In London the growth is higher – from a mean weekly rent of £233 a week a decade ago to £341 as of 2008 to 2009 – 46%.


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