Half of home loans in Scotland go to first-time buyers

In Scotland, a recent analysis revealed a significant trend in the housing market with more than half of all home loans being issued to first-time buyers. In 2024, the Bank of Scotland reported that 51% of all mortgages were granted to individuals stepping onto the housing ladder for the first time. This percentage matches a similar peak seen in 2020, indicating a robust upward trajectory for first-time buyers compared to earlier years in the decade. Notably, the lowest proportion was recorded in 2015, at 46%. As the housing market evolved post-COVID-19, many first-time buyers benefited from a favorable environment as restrictions eased and pent-up demand was unleashed. The data further illuminates the changing demographics of first-time buyers. According to Halifax, the average age of first-time buyers has increased to 33 years, making them two years older than a decade prior. Last year, 341,068 individuals entered the market for the first time, marking a 19% increase from the previous year, recovering from a 22% decline in 2023. Although this rebound is noteworthy, it falls short of 2022's figures, where 367,870 first-time buyers were recorded. The increase in first-time buyers can be attributed to improved mortgage affordability, aided by a decline in interest rates to 4.5%, as announced by the Bank of England. The easing of rates has provided crucial stability, allowing potential buyers more confidence in proceeding with purchases. Moreover, first-time buyers accounted for a staggering 54% of all home purchases made with a mortgage last year, reflecting their vital role in the housing landscape. Amanda Bryden, head of mortgages at Halifax, noted the trend of buyers teaming up when securing mortgages, which is increasingly common due to the high average deposit of £61,090 for properties typically valued at around £311,034. This collaborative purchasing strategy is seen as a practical approach to navigating the housing market's financial pressure, especially when single incomes may not suffice to meet the growing requirements. Looking ahead, while Halifax anticipates modest growth in house prices over the year, the impending reductions in stamp duty thresholds present new challenges for first-time buyers. Starting from April, the 'nil rate' stamp duty will decrease from £425,000 to £300,000, potentially complicating affordability for those looking to enter the market. The forthcoming adjustments to stamp duty, alongside the continuous evolution of the housing landscape, will ultimately shape the experience and opportunities for future first-time buyers.