First time buyers
First-time buyers put down an average deposit of £53,414 last year, the bank said, £21,000 more than a decade ago, so it’s hardly surprising that so many are joining forces to get onto the property ladder. The majority of mortgages (53%) for house purchases offered last year were to first-time buyers, although the overall number of first-time buyers fell by 293,339 last year, down 21% compared to 2022. Kim Kinnaird, director at Halifax Mortgages said: “Following a record year in 2021, unsurprisingly in view of the wider economic environment, the number of first-time buyers joining the property market fell again in 2023 to around 293,000. Despite this drop, new buyers made up over half of all home loans. However, to get a foot on the ladder most people are now buying for the first time in joint names.”
Advantages of buying a property jointly
The biggest benefit of buying a property with someone else is that you can share the cost of the deposit. This can make owning a property much more affordable, especially as house prices for first-time buyers remain over £132,000 more expensive, on average, than they were ten years ago (+86%).
The typical cost of a property for buyers entering the housing market in 2023 was £288,136, according to Halifax, although this is 5% lower than the previous year. A 10% deposit for a property this price would set you back nearly £30,000, but only half this amount if you’re buying jointly and are splitting costs equally. Buying jointly doesn’t just reduce the amount you as an individual need to put down as a deposit.
Having two incomes should help first time buyers borrow enough to buy. It also means you can share monthly mortgage payments.
This is particularly advantageous given mortgage costs have risen substantially over the past year, although rates are now starting to stabilise. You can also split household bills, such as council tax, gas and electricity bills and maintenance costs, leaving you with more disposable income.
Disadvantages of buying jointly
The main potential challenges of buying with someone else are if one person wants to sell up or move out before the other. It’s therefore vital to discuss what you will do if this happens before you make the purchase, so you know where you’ll both stand.
You might decide, for example, to set up a formal agreement, known as a ‘deed of trust’ which is a written record of how much each of you has paid into the property and what you’ll do if one of you wants to leave.
You’ll also need to think carefully about how you’ll own the property together. There are two main options, ‘tenants in common’ and ‘joint tenants’. You can read more about the different types of ownership in our guide ‘Joint Mortgages’
Going it alone
If you’d prefer not to buy with someone else but are struggling to afford a home on your own, it may be worth exploring Government schemes which might help make buying more affordable.
Ms Kinnaird said: “There are a number of schemes available to support first-time buyers, like the mortgage guarantee scheme, which allows us to offer up to 95% mortgages to first-time buyers and has been extended until June 2025.
Alternatively, the First Homes scheme offers discounts on new-build homes to first-time buyers, while shared ownership options allow new buyers to purchase some of the property and rent the rest.”You can find out more about government schemes to help first-time buyers in our guide Government schemes for first time buyers.
.jpg)
