It will come as no surprise that people are buying their first homes later in life than they used to. According to LV= Delayed Lifestyle report, in the 80s the average first property purchase happened at 29. That figure has increased steadily over the years, by almost a decade, to 38.
If the predictions are accurate, by 2025 the average first time buyer will have already entered middle age, at 41 years old.
This is what the report nicknames ‘Peter Pan’ syndrome, as Britons are waiting longer to take the major life steps of getting married, having children and buying property.
Again, hardly headline news, but there is a financial knock-on effect worth considering. Because most mortgages are paid over a term of at least 25 years, more and more homeowners will end up entering retirement age still paying their debts.
House prices, deposits and settling down
The reasons that people hold off are obvious. According to the report, 14.7 million people in the UK cannot afford to get married, have a child or buy a house. Nearly half of those in their 20s and 30s say they can’t buy a house on their current salary. Among people who have not yet bought a property, 46% blame not being able to afford the deposit, and 16% not being able to get a mortgage.
The decision is not purely financial. Another main reason given for not yet buying is that people do not want to settle down yet. But among those who do, the cost of a deposit and being able to find a mortgage for highly priced properties are clearly the main obstacles.
Richard Rowney, MD for LV= life and pensions, says it is not surprising that Brits are developing Peter Pan syndrome. But he does warn about the impact of delaying major financial steps, especially as it may push debts into older age as they approach retirement.
He says: ‘Seeking expert financial advice earlier on in life could help people plan better to meet these costs.’
Well, you know where we are if you need it.