First-time buyers over 40 years: Millennials have to work twice as hard to buy a home

The number of young people buying their first home is creeping up - but the Millennial generation buys later, spends more and devotes double the proportion of their salary than their parents' generation, research shows.

Which? examined 40 years of data around first-time buyers - including how old they were when they bought, how much they earned and how much they borrowed, published by UK Finance, which represents banks and lenders.

Millennials - those born between 1982 and 2004 - are facing higher hurdles than previous generations, though numbers of buyers are starting to bounce back.

Are Millennials still buying homes?

As house prices have risen in recent years, there have been warnings that young people have been locked out of the housing market.

While the average age that Brits buy their first home has climbed since 1977, the increase is just three years - and has flattened out over the last two decades.

In 1977, the median age of first-time buyers was 27. This climbed upwards over the 80s and 90s, hitting a peak of 31 in 2002. But since 2005, the age of first-time buyers has remained between 29 and 30 - the same as in the late 90s.

It's undeniable that there are fewer first-time buyers in the market than in previous generations. But since the market crash of 2008, there have also been fewer home purchases overall.

Home-buying hit a peak in the mid-1980s, and then again in the early 2000s, when almost 1.4m loans were approved for home owners. By contrast, there were just over 700,000 transactions for home owners in 2016.

As a percentage of all home transactions, first-time buyers have recovered strongly. In 2004, just 29% of all transactions were by first-time buyers - by 2016, that had risen to 50%. Initiatives aimed at helping first-time buyers - including Help to Buy - could be a major factor in this increase.

Find out more:How to buy a house - our guide for first-time buyers

Gap between price and income rising

The drop in home transactions could be explained by rising prices - and the data shows the gap between first-time buyer earnings and the amount they have to borrow has widened significantly.

In 1977, the median amount borrowed by a first-time buyer was just £8,376 - less than double their annual income. By contrast, a buyer in 2017 borrows on average around £137,000, representing 3.58 times their annual household income.

The average household income of first-time buyers today is also significantly higher than the average household income UK-wide - though it's important to note that the data does not distinguish between buyers who bought alone, and those who bought with a partner or relative.

Find out more:The cost of buying a house - what you'll need to spend

How has Help to Buy impacted on first-time buyers?

The government's Help to Buy scheme was first introduced into the UK in April 2013. In its initial form, it offered buyers of newly-built properties a 20% equity loan, with the buyers providing a 5% deposit.Today, this scheme continues to be available, as long as the property value doesn't exceed £600,000.

In the 2015 Autumn Statement, the government created a more generous scheme for London buyers, offering a loan of up to 40%.

Help-to-Buy originally also included a mortgage guarantee scheme, under which the government would provide a seven-year guarantee covering 15% of the loan. But this part of the scheme was discontinued on 31 December 2016.

Find out more: Affordable housing- how the government's housing affordability schemes work

Since Help to Buy was launched, 134,558 properties have been bought using the equity loan - of which, around 81% were first-time buyers. The availability of Help to Buy may help explain why the proportion of first-time buyers in the market has increased since 2013.

But the scheme has also attracted criticism, including the concern that first-time buyer prices are being artificially inflated by the scheme.

First-time buyers through the generations