There’s a growing trend of people over 50 years old buying their first homes. This surge in older first-time buyers (FTBs) is reshaping the traditional image of the housing ladder, with significant implications for both the market and financial services.
Recent data from mortgage broker Tembo reveals a significant increase in the number of FTBs aged 50 and above. This trend contrasts with the declining numbers of younger FTBs, particularly those under 30. The Financial Conduct Authority’s product sales data shows that while the overall number of first-time buyers has grown modestly by around 1% annually since 2018, reaching 360,000 in 2022, the older age group has seen a much more rapid increase.
Challenges in Saving for a Home
One of the key reasons for this shift is the increasing difficulty for individuals to save enough money for a housing deposit and to have sufficient income to afford a home. This challenge is particularly acute for younger potential buyers, pushing many to delay their first home purchase.
Regional Variations Across the UK
The trend of over-50s stepping onto the property ladder for the first time isn’t uniform across the UK. London, for instance, has the lowest proportion of these older FTBs, at just 2.4%. However, it’s also the region where this group is growing the fastest. From 2018 to 2022, the total number of FTBs in London increased by 22%, but the number of over-50s in this category surged by 64%.
In contrast, the South West boasts the highest proportion of over-50 FTBs, at 3.5% – a striking 44% more than in London. Regions like Scotland and the West Midlands, despite a general decline in total FTB numbers, have seen a sharp increase in over-50 FTBs, with growth rates of 8% and 22%, respectively. This trend is consistent across the UK, with the growth of over-50 FTBs outpacing the overall growth of first-time buyers.
Projections for 2030
Looking ahead to 2030, Tembo’s projections suggest a continued rise in older FTBs. If the total number of FTBs remains around the recent average of 360,000, it’s expected that 89,000 of these buyers will be over 40, accounting for a quarter of all FTB transactions. For those over 50, the number is forecasted to increase from 12,000 in 2022 to 19,000 by 2030, making up 5% of the total.
Richard Dana, founder and CEO of Tembo, said, “A perfect storm of factors impacting first time buyer affordability means we’re now seeing a sharp rise in the number of people waiting until they’re aged 50 or over before they buy their first home. This is presenting a challenge to both the financial services industry and would-be home buyers, with many traditional high-street lenders not offering extended mortgage loan terms beyond the age of 75.”
Conclusion
The changing demographics of first-time home buyers reflect broader shifts in society and the economy. With people living longer and facing different financial landscapes than previous generations, the traditional path to homeownership is evolving. This trend underscores the need for more flexible and innovative financial solutions to accommodate a diverse range of home buyers.