First-time buyers are increasingly choosing to purchase houses rather than flats, in the hope that they can avoid the need to move again.
More than a third of first-time buyers (33.5%) chose to buy semi-detached properties in August, according to Barclays’ latest Property Insights report. In contrast, flats accounted for just 19.6% of purchases, which is a 2.7% drop compared to the same time last year.
Three-bedroom homes are the most popular property choice, making up nearly half of all first-time buyer purchases in August. More than one in five (22%) buyers aged 28 to 43 said they bought a property with more bedrooms than they currently need, to avoid having to move later.
Jatin Patel, Head of Mortgages, Savings and Insurance at Barclays, said: “Our data shows that first-time buyers are not considering property merely to get a 'foot on the ladder' but for the long term. Whether it’s to create space for a growing family, or to invest for the future, it’s encouraging to see young people feel slightly more confident in taking this significant step.”
Buyers choose longer mortgage terms to help with affordability
More than four in 10 first time buyers (41%) opt for mortgage terms of 30 years or longer to help with affordability. Lenders have become increasingly flexible in recent years about how long mortgage terms can run for, although there is usually a maximum age limit when the mortgage must be paid off by.
Although opting for a longer mortgage term can help reduce your monthly mortgage payments, it does mean that you could end up paying more back overall. Despite this tradeoff, nearly four in 10 (37%) mortgage holders said they prefer 30-40-year term mortgages rather than those than shorter terms due to lower monthly costs. Homeowners report that on average, their mortgage payments accounted for 27.7% of their take-home pay in August, up from 26.6 per cent in July.
Mr Patel said: “It’s clear that buyers are still cost-conscious as 30+ year mortgage terms become more popular - this option helps consumers reduce their payments by stretching their borrowing over a longer period of time."
