First-time buyers stretch to 'forever homes', opt for 30‑year-plus mortgages, Barclays data shows

First‑time buyers in the UK are increasingly buying larger homes and taking out longer mortgage terms to make those purchases affordable, Barclays data shows.

Barclays reported that 33.5% of first‑time buyers purchased a semi‑detached property in August, up 1.7 percentage points year‑on‑year, while flats accounted for 19% of purchases, down 2.7 percentage points. Three‑bed properties were the most popular size, representing 46% of first‑time buyer purchases in August. The lender also found that 41.3% of first‑time buyers used a mortgage with a term of 30 years or more.

Lenders and market analysts say the data points to a widening preference for what borrowers view as a "forever home": a first property that will meet longer‑term needs and reduce the likelihood of a costly move later. Barclays said many buyers are stretching their finances to avoid future removals, renovation costs and stamp duty — which can run to several thousand pounds on subsequent moves.

Longer mortgage terms reduce monthly payments by spreading capital and interest over a greater number of years, but increase the total interest paid over the life of the loan. Barclays found that 37% of mortgage holders favoured 30‑ to 40‑year terms because of the lower monthly repayments. At the same time, 41% of homeowners told the bank that mortgage payments took up too much of their monthly income; on average mortgage costs accounted for 27.7% of take‑home pay in August, up from 26.6% in July.

The shift toward larger homes is most pronounced among younger buyers. Halifax data cited by Barclays shows the average age of a first‑time buyer is 33, and the millennial cohort aged 28 to 43 are the most likely to prioritise extra space. Barclays said 22% of that age group deliberately purchased properties with more bedrooms than currently needed to avoid upsizing later, compared with 13% across all age groups. Almost three in 10 recent buyers said they intended to remain in their new home for at least 10 years.

"Our data shows that first‑time buyers are not considering property merely to get a 'foot on the ladder' but for the long term," Jatin Patel, head of mortgages, savings and insurance at Barclays, said in response to the findings. He added that 30‑plus year mortgage terms have grown in popularity because they help consumers reduce monthly payments by stretching borrowing over a longer period.

Mortgage market rules and lender behaviour have also changed in ways that make larger loans and longer terms more available. A lending cap introduced in 2014 limited loans at more than 4.5 times a borrower’s income to 15% of a lender’s book. Regulators and lenders have since relaxed aspects of affordability testing and volume constraints, allowing some institutions to offer loans at higher multiples — in some cases up to six times salary — and to widen their product ranges. Nationwide and Lloyds are among lenders that have expanded offerings for borrowers seeking higher income multiples.

Some building societies and banks have also launched products with smaller deposit requirements. Newcastle Building Society recently introduced a mortgage that requires a 2% deposit, though it is restricted to borrowers who are not relying on parental support. Lenders have also adjusted the "stress rates" used in affordability assessments — the hypothetical higher interest rates applied to test whether a borrower could still afford repayments if rates rose — which can influence how much a household is allowed to borrow.

Market participants caution that borrowers who choose longer terms will pay more interest overall and may face higher monthly costs if interest rates rise. They also note the broader costs of moving that drive the desire to buy a larger first home: stamp duty, legal fees, surveying and removals, together with the prospect of renovation or adaptation when family needs change.

Housing market advisers and mortgage brokers recommend that those needing a mortgage or facing the end of a fixed‑rate deal begin shopping for options as soon as possible. Homeowners can typically lock in a new deal six to nine months before a current rate expires, often without obligation, and many deals allow arrangement fees to be added to the loan. Borrowers should weigh the effect of adding fees to the loan against the benefit of securing a rate and consider whether higher total interest on a longer term is acceptable for their finances.

The trend toward larger first homes and longer mortgage terms comes as housing affordability remains strained and households balance the competing pressures of monthly cash flow and lifetime interest costs. Policymakers and regulators have emphasised access to responsible credit, and lenders say they are offering a wider range of products — including low‑deposit options — intended to help more households buy, while continuing to test affordability against future rate scenarios.

Mortgage borrowers are reminded that homes can be repossessed if repayments are not met and that mortgage products and rules can change quickly. Independent financial advice or consultation with a mortgage broker can help buyers understand the trade‑offs between deposit size, term length, monthly cost and total interest paid.