A third of first-time buyer purchases are semi-detached properties, as young people get mortgages for ‘forever homes’
New mortgage data from Barclays Property Insights reveals that more first-time buyers are purchasing semi-detached properties, as they report a greater appetite for ‘forever homes’.
The continued push by banks and building societies to offer income-stretch mortgages, larger loan sizes, and lower deposit deals is making it easier for many first-time buyers to secure more generous mortgages and buy semi-detached homes.
Barclays mortgage data shows that three-bedroom homes are the most popular choice for properties, making up 46.4 per cent of all purchases in August. Millennial homeowners, aged 28 to 43, are the most likely age group to prioritise extra space – over a fifth (22 per cent) say they bought a property with more bedrooms than they currently need, to avoid upsizing later. This compares to just 13 per cent across all ages.
Aaron Strutt, product director at Trinity Financial, says: "Most people want to have outdoor space, but if they live in an expensive area, they need to have a sufficiently large salary to borrow enough to get a house. It is generally possible for first-time buyers to borrow between 4.5 and 6 times their salary through a range of lenders. Barclays' data is interesting because it highlights that the recent income multiple changes are allowing more younger people to buy larger properties. This is a trend our brokers have noticed."
First-time buyers and semi-detached homes
Barclays data shows first-time buyers are increasingly turning to houses, with semi-detached properties making up over a third (33.5 per cent) of August’s first-time purchases, up 1.7 per cent year-on-year. The bank says flats declined in popularity by 2.7 per cent, accounting for a fifth (19.6 per cent) of first-time buyer homes.
A third (33 per cent) of recent Gen Z buyers2, aged 18 to 27, said they bought a ‘forever home’ so that they wouldn’t have to move. Similarly, nearly three in 10 (27 per cent) of all recent buyers said they intend to stay in their new home for at least 10 years.
When choosing a property, individuals at different life stages tend to prioritise certain features, but this really does depend on the area buyers are purchasing in. Nearly half (49 per cent) of those aged 44 to 59, and 40 per cent of Millennial homeowners said they prioritised having a garden or outdoor space. Comparatively, only a third (32 per cent) of Gen Z felt the same. Meanwhile, Gen Z were much more likely to want a dedicated work from home space (28 per cent) compared to 20 per cent of Millennials and just 9 per cent of Gen X.
Borrowers opting for longer mortgage terms to keep costs down
Barclays data also shows an increase in the popularity of 30+ year mortgage terms. Among first-time buyers, these account for 41.3 per cent of purchases, as they are typically younger and so have longer to pay back a mortgage.
When asked about their preferences, nearly four in 10 (37 per cent) mortgage holders feel 30-40-year terms are more desirable than shorter durations because they could mean lower monthly repayments. This comes as four in 10 homeowners (41 per cent) believe their mortgage payments take up too much of their monthly income. On average, homeowners report their mortgage accounts for 27.7 per cent of their take-home pay, up from 26.6 per cent in July.
Call Trinity Financial on 020 7016 0790 to secure a mortgage to buy a semi-detached or detached house or book a consultation
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
Source: Barclays press release
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