The number of individuals aged 50 and over purchasing their first home has significantly increased in recent years, according to new data. Between 2020 and 2024, the number of first-time mortgages taken out by people over 51 rose by 43%, from 5,511 annually to 7,865. Over this period, 55,639 homes were purchased by this demographic.
Analysis of Financial Conduct Authority data by mortgage platform Tembo reveals that first-time buyers aged 41 or older have increased by an average of 10.5% per year since 2020, outpacing the overall first-time buyer market growth of 2% annually. Those over 40 now represent 16.4% of the market, and Tembo projects that by 2030, nearly a quarter of first-time buyers will be over 41.
This trend is occurring as the Treasury plans to replace the Lifetime Isa (Lisa) savings account with a new version set to launch in 2028. The updated account will offer a government bonus on savings and will remove the upper age limit for opening an account, unlike the current Lisa which is only available to those under 40. Existing Lisa savers can continue contributing until age 50, but the new account will allow contributions indefinitely.
Several factors contribute to the aging demographic of first-time homebuyers. Persistent high house prices, despite recent slight decreases, remain a significant barrier. The average property price currently stands at £298,806, and homes typically cost 5.6 times average earnings, a ratio higher than in the 1990s. Stricter affordability checks by mortgage lenders also make it more challenging to secure a loan.
Lifestyle changes, including later marriages and starting families, delay property purchases. Additionally, an increasing number of people are buying homes as single individuals, which often requires longer saving periods for a deposit and a higher income to qualify for a mortgage alone.
Geographically, London has the highest proportion of first-time buyers over 51, accounting for 5.56% of the market in 2024, followed by the North East at 4.81%. The East of England has the lowest proportion at 2.82%.
Shared ownership schemes are also growing in popularity among older buyers. Between 2023 and 2024, the share of properties bought through shared ownership by individuals over 51 increased from 14.8% to 17.4%. This scheme allows buyers to purchase a minimum 25% share of a property while paying rent on the remainder, with the option to increase their stake over time.
Richard Dana, founder and CEO of Tembo, stated that the rise in older first-time buyers is not a lifestyle choice but a consequence of years of affordability pressures. He noted that people are taking longer to save, earn sufficient income, and gain confidence in managing homeownership.
Mortgage rates have experienced volatility, influenced by inflation expectations. This underscores the importance for prospective buyers and those remortgaging to explore options promptly. For those purchasing a home, securing a mortgage rate early can provide certainty on monthly payments. Buyers are also advised to be mindful of potential house price fluctuations due to the impact of higher mortgage rates on borrowing power.