A growing number of Britons are purchasing homes independently, a trend that has increased significantly compared to previous generations. Analysis by Barclays bank revealed that in June, 37 percent of mortgage completions were by solo buyers, a stark contrast to the 15 percent reported before 1980. This rise in single homeownership occurs even as property prices have become substantially more expensive relative to average salaries. In the 1970s, the average home cost approximately 3.2 times the average annual salary, while current government data indicates this figure is around 7.5 times.
Barclays suggests this 'buying solo' trend reflects evolving lifestyles and a desire for financial independence, despite the inherent challenges of entering the housing market alone. Charlotte Bolan, a 37-year-old NHS procurement worker and single mother from Cardiff, exemplifies this trend. Earning £43,000 annually, she is in the process of buying her first home independently.
Bolan managed to accumulate a £20,000 deposit through disciplined saving, which included forgoing car ownership in favor of public transport. She also utilized a Lifetime Isa (LISA), a government-backed savings account that provides an annual bonus of up to £1,000 on savings up to £4,000, effectively offering a 25 percent government boost. She plans to secure a £175,000 mortgage on her chosen property, a two-bedroom house in Cardiff that requires renovation, for which her offer of £195,000 was accepted.
Initially, Bolan believed her only option was to find a partner to co-purchase a home due to the higher borrowing capacity this would provide. She noted that the property market in Cardiff is exceptionally competitive and prices continue to escalate. To accelerate her savings, she and her daughter moved in with her parents several years ago, paying a reduced rent of £400 per month, significantly less than private renting. This arrangement, coupled with her parents' assistance with childcare, allowed her to save more effectively. Her daughter's father has not provided financial support since their relationship ended when their daughter was two.
Barclays' research indicates that independence and greater control over housing situations are key motivators for solo buyers, alongside a desire for long-term stability, with over half of adults viewing homeownership as the primary source of financial security. While Bolan is realizing her homeownership goal, many prospective buyers feel the dream is becoming increasingly unattainable. Analysis by Moneybox found that a typical buyer earning the national average wage, saving 20 percent of their net income in 2021, would require 4.5 years to save a 10 percent deposit on a standard £228,000 home. However, by the end of that period, house price growth would have increased the cost of the same home by £37,250, leaving a £3,541 shortfall on the required deposit.
Despite increased saving efforts, with average monthly contributions to Moneybox Lifetime Isas rising from £344 in 2023 to £475 currently, nearly 70 percent of first-time buyers report their savings journey is taking longer than anticipated. Many are compromising on location or property features like size or off-street parking. Brian Byrnes, director of personal finance at Moneybox, highlighted the frustration of constantly shifting goalposts, with house price growth outpacing average savings. He emphasized the importance of maximizing savings, noting that LISAs can provide a crucial boost to help bridge the deposit gap.
Mortgage rates have recently increased due to inflation, reversing earlier hopes of a Bank of England rate cut. This makes the process of remortgaging or purchasing a home more expensive, underscoring the importance of securing the best possible mortgage rate and seeking professional advice. The government is consulting on a new savings scheme intended to replace the Lifetime Isa from 2028, though existing LISA savers will be able to retain their accounts and bonuses.