The rise of the millionaire first-time buyer

February 2021

While the coronavirus pandemic has undoubtedly hit younger households more than other workers, perhaps surprisingly it’s also led to an increase in the number of million pound first-time buyers.

Our latest research shows that one in fifty first-time buyers spent £1m or more on their first home in 2020 - double the share recorded in 2019.  The Covid induced race for space combined with low mortgage rates and a stamp duty holiday have accelerated the trend.  As working from home becomes more important, some inner-city renters who have already saved up money for a deposit have decided to make the leap further afield to buy their first home. 

First-time buyers purchasing in London are most likely to spend seven figures on their home.  Last year, 8% of buyers spent £1m or more on their first home, up from 5% in 2019.  In the South, the number was one in 25 – also double the share in 2019 and four times that in 2018.

This is one of the reasons why the average price of a home bought by a first-time buyer in 2020 has risen to £253,700 – passing the £250k threshold for the first time.  In the South, the average first-time buyer spent £360,640 on their new home, more than double that of someone buying in the North.

In many cases, first-time buyers are waiting a little longer before buying.  Londoners, in particular, are leap-frogging the traditional housing market ladder and buying a bigger family home in the suburbs or further outside the M25, rather than a smaller flat in the inner zones.  

Six of the top 10 local authorities with the highest share of first-time buyers spending more than a million pound were outside of London.  While Westminster tops the list, Hammersmith & Fulham and Sevenoaks come in joint second where half of first-time buyers spent seven figures on their first home last year.