Pandemic adds two years to the average age of first time house buyers

As previously covered, the Covid 19 Pandemic saw an unprecedented property market boom across the UK. This was, in part, thanks to government intervention in the form of the Stamp Duty Holiday. While many homesellers reaped the benefits of the seller’s market however, first time buyers may not have been so lucky.

Our latest research shows that the pandemic may have pushed the average age of first time buyers up by approximately two years - and that’s just those who managed to stay in work thanks to the government’s furlough scheme.

Furlough: much needed intervention falls short in savings

For many UK workers, the furlough scheme was a much-needed lifeline that allowed them to keep their jobs during the most difficult stages of the pandemic. Beginning on the 9th March 2020 and ending on the 30th September 2021, the furlough grant saw the government pay 80% of wages up to a £2,500 per month threshold.

With the average gross UK salary around £31,646 at the time, this meant that workers retained an average income of £31,868 over the 19 months the furlough scheme was in place. That’s a loss of £7,969 for the average worker when compared to their regular annual income.

So what did this mean for the average first-time buyer hoping to save for their first step on the property ladder?

Average age of first time buyers climbs to 34

Back in 2020, the average first time buyer could expect to buy a property at £199,246 with an average deposit of 15% or £29,887, to secure their first property. This milestone would have approximately taken them 6.6 years to achieve based on saving 20% of net income per month (£377) and purchasing their first home at age 32.

However, with a loss of £7,969 resulting from furlough, the average first time buyer would have to save £377 per month for a further 1.8 years to bridge the mortgage deposit gap. Unfortunately, this means those first time buyers who were hoping to buy their first home during the pandemic have seen their average age when purchasing back to almost 34.

Our data and methodology

Methodology:

** Furlough scheme information sourced from House of Commons.

• Average wage data sourced from Gov.UK - Annual survey of hours and earnings.
• Average first time buyer mortgage deposit of 15% sourced from BankRate.
• Average time to save a deposit based on saving 20% of net monthly income sourced from YesHomeBuyer.
• Increase in average first time buyer age based on average time to save for a 15% deposit at a rate of 20% of net income per month (£377). Then comparing this timeframe to the additional time required to save the income lost due to being on furlough. Average saving per month (normal period) vs furlough lost earnings = estimated additional time of 1.8 years.*

Summary: The pandemic’s almost over but we’re still recovering

With the early throes of Covid 19 almost a distant memory (fingers crossed), it seems that we’re still recovering from the trials and tribulations of the pandemic. For some homeowners, the pandemic was a blessing and a curse. While many managed to sell their properties and move up the ladder, many were left stewing over the potential repercussions of moving somewhere new. For first time buyers however, their dream of a new home has been made all the harder to achieve.