New analysis from Mojo Mortgages reveals the stark realities first-time buyers are grappling with today, comparing the challenges they face with those of couples attempting to buy homes 50 years ago in 1974.
Skyrocketing property prices, higher deposit requirements, and stagnant salary growth have all created a more difficult path to homeownership for today’s buyers.
The average house price in 1974 was a modest £10,027. Fast forward to 2024, and the figure has ballooned to £265,012 – an astonishing increase of 2,534%. Over the same period, the average joint salary rose by only 1,791%, reaching £67,288. If house prices had risen at the same rate as wages, the typical home would cost just £189,100 today, £75,912 less than the current average.
DEPOSIT DILEMMA
The analysis highlights the dramatic increase in deposit requirements. In 1974, a couple needed only 15.05% of their joint income for a deposit, amounting to £537.
Today, that figure has surged to an eye-watering 86.65%, with an average deposit of £58,303 – over 100 times higher.
The time it takes to save for a deposit has also stretched dramatically. In 1974, it took just three months for a couple to save, but today, it takes a staggering 11 years and 3 months.
MIND THE GAP
The average age of a first-time buyer has also increased, from 26 years old in 1974 to 33 years and 8 months in 2024. This shift reflects the prolonged financial struggle many face in saving for a home, as rising prices outpace income growth.
DOOM BUSTERS
Despite the gloom Mojo Mortgages reports a 21% increase in first-time buyer activity in 2024 compared to the previous year.
John Fraser-Tucker, Head of Mortgages at Mojo Mortgages, says: “The 21% increase in first-time buyer activity speaks volumes about the resilience and determination of today’s homebuyers.
“While the process is undoubtedly harder than it was 50 years ago, many are finding innovative ways to navigate the market, whether through shared ownership schemes, family support, or government initiatives.
“With access to thousands of products and over 70 lenders, we’re committed to supporting first-time buyers and helping them turn their dreams of homeownership into reality.”
