In the current mortgage market, the vast majority of first-time mortgages are being taken out under joint names, and typically couples have found it easier to get a first-time buyer’s mortgage compared to single people.
Whilst this has always been true to an extent, the gap has widened recently, a consequence of average house prices reaching over £360,000 according to Rightmove.
For Liverpool mortgages, it is a similar story, with houses costing over £208,000 on average.
This has caused, according to data collated by Halifax, nearly a third (63 per cent) of first-time mortgages being taken out in joint names, with just 37 per cent by comparison having one name on the list.
The mix of intense price rises caused by over three years of market demand, the September 2022 mini-budget causing a shock rise in mortgage rates that has started to fall in 2023 and the effect of stringent affordability tests brought about by the 2008 Financial Crisis combined to affect single first-time buyers.
One of the biggest reasons why this is the case is somewhat straightforward; a joint mortgage application considers more than one source of income.
For example, if a married couple had the highest earner apply for a solo mortgage, they would only be able to borrow up to 5 times (lender terms may vary) their income depending on circumstance. If that person earned £35,000 per year, they would be able to borrow up to £175,000.
By contrast, if the other part of the couple, making £20,000 was signed up to a joint mortgage, then the couple can borrow up to £275,000, which would put them with a 10-15 per cent deposit close to the average price of a home and enough to give them options in Liverpool.
With mortgage lenders tightening their affordability criteria, single first-time buyers are increasingly finding themselves struggling to find the right mortgage for them.