The week in property statistics: Service charges reach record high

People getting onto the housing ladder accounted for 54% of all homes bought with a mortgage last year, the biggest majority on record.

Let’s face it, unless you’re lucky enough to have the backing of the Bank of Mum and Dad, or perhaps you’ve hit the jackpot early in your career, getting onto the housing ladder is a long, hard slog.

But incredibly, first-time buyers made up more than half of all homes snapped up using a mortgage in 2024 — the biggest majority on record.

According to Halifax, the first-time buyer market rebounded last year, with the number of people buying their first home up by 19% compared with 2023.

The lender’s head of mortgages, Amanda Bryden, says the jump ‘likely reflects an improvement in mortgage affordability, as interest rates eased and stabilised, providing more certainty for those stepping on to the ladder’.

The end of the stamp duty holiday next month has also no doubt fuelled momentum. As Tom Bill, head of UK residential research at Knight Frank, points out: ‘With a potential stamp duty saving of more than £6,000 if they act before April, first-time buyers have felt an added sense of urgency in recent months.’

But while mortgage affordability may be easing, it’s still tough out there. With the cost of living squeeze, rising house prices, and mortgage rates that are high by historical standards, is it any wonder that first-time buyers are getting older? The average age of a new homeowner last year was 33 years old. That’s two years older than 10 years ago and, perhaps starker, the oldest in two decades.

And many people are teaming up to make the maths work. Almost two thirds of mortgage completions last year were in two or more names.

Service charges reach record high

As if household bills aren’t high enough already! The average annual service charge for a flat in England and Wales climbed 11% last year to reach £2,300, according to Hamptons.

The rise outpaced Consumer Price Index (CPI) inflation rate of 2.5% - and was the biggest annual increase since Hamptons’ index began in 2016. Service charge tends to cover things such as building maintenance and repairs.

The estate agency adds that increasingly, service charges are leaseholders' largest household bill after their mortgage. Some 51% of leaseholders pay more in service charges than in council tax.

Where to fly solo

While we’re on the topic, if you’re planning to get onto the housing ladder ‘tout seul’, your best bet is to buy in the north.

According to Zoopla, the most affordable city for single first-time buyers is Aberdeen. Buyers in the Scottish city would need to fork out average monthly mortgage payments of £510 for a one- or two-bedroom home, around 16% of the typical monthly salary in the area, although that data may be skewed by the presence of the oil and gas industry.

Liverpool has been crowned the most affordable city in England for single Brits, taking second place in the ranking. In fact, northern England dominates the top five list of affordable cities, with Sheffield, and Newcastle also making the cut. Glasgow came in third place.

But there’s cause for optimism for first-time buyers in southern England (excluding London), where house price growth over the last year has been lower than earnings growth. Affordability has improved the most in the likes of Bristol, Oxford, Portsmouth and Cambridge, the property portal added.

Still growing, just not as quickly

The average price of a home brought to the market this month has increased by 0.5% to £367,994, a ‘muted’ rise for this time of year, according to Rightmove.

Colleen Babcock, property expert at property portal, attributes the pricing restraint to the upcoming stamp duty deadline and high competition among sellers. The number of homes for sale is at a 10-year high, cutting sellers’ pricing power.

Babcock says: ‘Agents report that some of the steam is coming out of new sellers’ price expectations to fit the changing market conditions, which is a sensible reaction to attract buyer interest, and it will also help to support activity levels.’

Meanwhile RICS’ closely-followed monthly survey suggests a ‘broadly flat picture’ for buyer appetite and sales in January. But surveyors expect momentum to pick up in the months ahead. House prices continued to rise ‘steadily nationally’.