First-time Buyers
Delayed first-time buyers lose £270,000 – Hall
Older first-time buyers who spend their twenties renting could have lost out on more than
The research compared rising rent expectations with mortgage repayments pegged to the original purchase price.
Those buying at the average first-time buyer age of 37 would lose over a quarter of a million compared to those who bought at 24. However, they would still save £866,000 compared to those who never bought a home, the model found.
TMW founder Brian Hall said: “That is a lot of money. You can save the cost of a house through your lifetime by buying earlier. Even today when property prices are falling or stagnant it is still better to buy.
“Brokers need to encourage young people to get off the fence, stop renting and somehow find a way of buying. If the Help to Buy scheme is the only option on the table they should consider it.”
Rising rent was calculated using a Countrywide yield figure of 6.8% of the average property price. The cost of home ownership took into account a 20% deposit and a property price inflation figure of 6.5% against a background inflation of 5.6%.
According to the analysis, a homeowner who bought at 24 could accumulate wealth of £773,915 by the age of 67. By contrast, one who bought at 35 would accumulate £565,525.