First-time buyers behind half of London property sales

Falling mortgage rates allow more people to get their foot on the property ladder

First-time buyers have bought record 50pc of homes sold in London this year.
Across the country, the share of houses purchased by first-time buyers hit an all-time high of 33pc in the first quarter of 2024, as falling mortgage rates allowed more people to get their foot on the property ladder.  
The biggest jump in first-time buyer purchases was in the South of England, according to analysis by estate agents Hamptons. In London, half of sales went to first-time buyers, up from 28pc a decade ago, as lower rates unlocked house moves in more expensive areas.  
However, first-time buyers still faced an affordability squeeze, forcing them to borrow less and opt for smaller homes.
For the first time, over half (51pc) of first-time buyers purchased a one or two-bedroom property. Meanwhile, the average London first-time buyer spent £108,710 less than in 2020 when mortgages were cheaper.
Aneisha Beveridge, of Hamptons, said: “In a bid to escape the heated rental market, first-time buyers have dominated the sales market this year, making up a record third of all purchasers. 
“This unprecedented move comes despite a limited package of government support measures. Instead, with high mortgage rates curtailing their ability to borrow, most are compromising on a smaller home to get a foot onto the housing ladder.”
The analysis also revealed the areas with the highest share of first-time buyer purchases. Top of the list was Slough, where first-time buyers were behind 89pc of purchases.
Over the last decade, the share of homes going to first-time buyers across Great Britain has doubled from 17pc in 2014 to 33pc today.
However, Hamptons warned that this trend could slow as higher rates and limited supply push homeownership out of reach for many.
Research by high street lender Halifax recently found that the average cost of home ownership has more than doubled since 2013 to hit £1,231 per month.
This means owning a home is now less affordable than renting in every region apart from South West England, Greater London and Scotland.
The Government was reportedly considering “99pc mortgages” to help first-time buyers, but this idea was dropped ahead of the Budget. No other support was introduced.
MPs last week criticised the Government’s flagship affordable homes scheme – so-called “shared ownership” – which has been promoted as a way for struggling first-time buyers to get their foot on the housing ladder.
The MPs said the part-buy, part-rent scheme is “drastically failing” shared owners who can end up paying service charges and rents so high that they never save enough to buy the home in full.        
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