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There has been a growth of older first-time buyers, increases in average loan sizes, and longer mortgage terms being searched for, the latest data from Legal & General Mortgage Services reveals. 

It found there was a 13% increase in 56 to 65-year-olds searching for their first property in Q1 2024 compared to the same period last year suggesting that a growing number of buyers are having to wait until their late 50s and beyond to take their first step onto the housing ladder.  

Legal & General’s data platform Ignite found in the 12 months to April 2024, 38% of potential buyers in the UK were first-time buyers (FTBs), with an average age of 33. 

When comparing Q1 2024 and Q4 2023, there was a 37% increase in 18 to 30-year-old FTBs searching for a property, and a 33% increase in 31 to 40-year-old FTBs.

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The Bank of England has held the base rate at 5.25% for the sixth time in a row. But there are now stronger signs that a rate cut might be coming soon – which could have a knock on impact on mortgage and savings rates. Here’s what you need to know.

The base rate is used by the central bank to charge other banks and lenders when they borrow money – and so it influences what borrowers pay and what savers earn. It’s also used by the Bank as a tool to control inflation (the rate at which prices rise).

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For a long time the traditional length of a UK mortgage has been 25 years, but runaway house prices and, more recently, dramatically higher borrowing costs are prompting more and more people to “go long” on their home loans.

On Monday, the former pensions minister Steve Webb revealed that younger homebuyers were increasingly being forced to gamble with their retirement prospects by taking on ultra-long mortgages lasting beyond the end of their working life.

The ex-Liberal Democrat MP published data obtained via a freedom of information request indicating that in the past three years, more than 1m mortgages that stretch beyond the current state pension age have been taken out.

Webb tabled the request in response to a recent report from the Bank of England’s financial policy committee (FPC) that revealed that almost half of all new mortgages issued in the final three months of 2023 were for terms of 30 years or more.

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t might look like house prices have stabilised, staying relatively flat over the first four months of 2024, but at least one mortgage expert says there’s now a  north/south divide thanks to the costs of borrowing.

Sarah Coles, head of personal finance at Hargreaves Lansdown, says: “This is a function of the fact that mortgage rates remain so stubbornly high. Banks are pricing in the fact that the Bank of England’s cuts are expected later than they had hoped for earlier in 2024. At the end of April, the average two-year fixed rate mortgage had crept up to 5.87% – from 5.8% at the end of March.

“It’s not a dramatic move, but it’s in the wrong direction, and it’s coming at a time when homeowners expected mortgage rates to be dropping.

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The number of mortgage approvals made to home buyers jumped in March to the highest level since September 2022, according to Bank of England figures.

In an indication of property sales to come, mortgage approvals for house purchases rose from 60,500 in February to 61,300 in March.

It was the highest total since more than 65,300 mortgages for house purchase got the green light in September 2022.

Approvals for remortgaging decreased from 37,700 to 34,200 over the same period, according to the Bank of England’s Money and Credit report.

The report was released as HM Revenue & Customs (HMRC) figures showed that home sales across the UK increased for the third month in a row in March.

Some 84,200 home sales took place in March, which was 6% lower than March 2023 but 1% higher than February 2024.

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Large numbers of mortgage borrowers are continuing to opt for two-year fixed deals in the hope that interest rates will be lower when they next come to remortgage.

Some 42 per cent of all mortgages were fixed for two years in January and February, according to the latest figures from UK Finance.

But hopes of base rate cuts, which feed in to prices on fixed rate mortgages, have been dampened in recent weeks. 

While markets had previously been betting on there being six or seven base rate cuts this year, it is now only forecasting two or three.

This calls into question whether opting for a more expensive two-year fix over a cheaper five-year one still the best choice for home buyers and those remortgaging. 

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Britain’s biggest mortgage lender today said flats are back in fashion as first time buyers target smaller properties due to high mortgage costs.

Halifax said prices of flats are now rising faster than houses four years after the pandemic triggered a “race for space” that boosted demand for homes with gardens and left small flats without outdoor space almost unsellable. 

The lender today revealed that the property market trod water during April with the average price rising 0.1% in the month to £288,949, while the annual rate of growth was 1.1%. 

In London prices rose 0.1% year on year to an average £539,336.

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Self-employed mortgage borrowers face an even tougher set of challenges in a cost-of-living crisis and high interest rate environment than their PAYE counterparts when it comes to getting a mortgage.

But self-employed mortgage product choice and lender support are strong, say brokers, putting today’s market back on a par with pre-pandemic conditions.

Homeowners who work for themselves not only have their own rising bills and interest rates to manage, but some must deal with their customers cutting back on how much they spend as budgets get tighter.

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Homeowners have been dealt a fresh blow after experts warned key mortgage rates could surge above 6 per cent again as early as next week.

More than 20 lenders have hiked their mortgage rates this week, pulling some of the most competitive home loans from the market, including several deals below 5 per cent.

The cost of borrowing has been surging since Bank of England officials signalled last week that a long-awaited cut in rates would be delayed further. 

Santander yesterday increased its mortgage rates by up to 0.26 percentage points for the second time in four days.

The move follows increases at NatWest, Halifax and Nationwide, which also pushed up the prices of their fixed-rate purchase and remortgage deals by up to 0.25 percentage points.

Now, the average two-year fixed-rate deal could breach the 6 per cent mark in the coming days – for the first time since December. 

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Halifax said the average UK house price, external had risen by 0.1% in April, with a typical home now valued at £288,949.

Prices last month were up 1.1% from the same point last year, following a 0.4% annual rise seen in March.

Amanda Bryden, head of mortgages at Halifax, said the housing market was “finding its feet in an era of higher interest rates”.

“While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability,” she added, with activity and demand improving.

“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals,” Ms Brydon said.

“Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts.”

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