16 January 2024

How first-time buyers are affording their homes and which additional costs surprise them.


In the midst of a cost of living crisis, getting on the property ladder can be financially daunting. Uswitch mortgages conducted a recent survey to investigate purchase trends amongst first-time buyers to identify how they afford their properties. The survey revealed that:

  • Almost half (45%) of first-time buyers get help from Government schemes
  • More than a third (34%) use the bank of mum and dad to get on the property ladder
  • Only one in ten (11%) first-time buyers didn’t receive any support to purchase their property
  • Most first-time buyers are unaware of additional house buying fees with only one in ten (7%) aware of mortgage admin fees

Most common first-time buyer purchase methods: 

Residents in Northern Ireland can use Government schemes such as the House Sales Scheme, whereby eligible tenants of the Northern Ireland Housing Executive have the right to buy their homes at a discount.The Northern Ireland Co-ownership scheme can also help people who cannot afford to buy a home outright. The government will also add a 25% bonus to your Lifetime ISA savings, up to a maximum of £1,000 per year which can be withdrawn when you want to purchase your first home.

The second most common purchase method highlighted in the survey was buying with a ‘traditional’ mortgage (44%). The majority (38%) of first-time buyers who bought a house with a mortgage opted for a standard variable-rate mortgage, or a fixed-rate mortgage (32%). 

34% of first-time buyers got help from their parents to get on the property ladder, with 24% getting a loan from their parents for the deposit, and 10% of buyers’ parents gifting them money towards their purchase. 

In terms of ownership, the survey also revealed that almost half (48%) of first-time buyers are the sole property owners, while 33% bought with a partner. 

Additional costs:

Uswitch mortgage expert, Kellie Steed, shares tips about what to consider before buying your first home:It can be easy for first-time buyers to only focus on rates when looking at mortgage deals. While the rate is really important in working out how expensive your repayments will be each month, buyers should also consider the fees involved. A mortgage deal with a low headline rate can sometimes wind up being more expensive than higher-rate deals due to fees. 

“On average, the arrangement fee alone sets a first-time buyer back around £345[1]. But this is an average figure – in reality, some first-time buyers may pay nothing while some may face a cost of over £2,000. That’s why it’s so important for prospective homeowners to be aware

of the fees associated with a mortgage. You can find out more at Uswitch mortgages.

It’s also advisable to be aware of what legal fees are involved in purchasing a home and its recommended to speak to a Conveyancing solicitor in advance and obtaining a quote. Wilson Nesbitt Solicitors can help with  this via their online legal fee quotation service: Calculate your legal fees.

 When factoring additional expenses into the purchase budget, the survey revealed that most first-time buyers are unaware of some important financial considerations prior to buying their property:

  • 79% were unaware of stamp duty costs, although the government have implemented a first-time buyer stamp duty relief measure in England and Northern Ireland – if you’re buying a property up to £425,000, you don’t have to pay stamp duty.
  • Less than half (45%) were aware of survey costs. When buying a property, a valuation (checking if the property is worth what you’re offering) is essential and usually involves paying a fee to your lender. A survey is more detailed than a valuation and checks that the property is structurally sound, so can be beneficial. Survey fees vary depending on the level of detail requested and the size and value of the property. 

If you’re ready to begin to search for your first time home then take a look at what’s available in your area and within your budget here.

Related Articles