news release



Increase in applications driven by young professionals looking to get out of the renting cycle
Older, wealthier groups also applying for mortgages in growing numbers

London, UK, 24 March 2014 - Experian insight has revealed that first time buyers in the UK are an aging group with young professionals having to save harder and longer for their first house, and wealthy older groups buying to let or stepping in to help their children fund properties. Geographically, southern regions are experiencing high demand for first-time buyer mortgage applications, with year on year application increases tipping eight per cent in the capital.

The research, sourced using Experian Mosaic and mortgage application demand data, highlights West London as the location where relative demand for mortgages is greatest. Interest in outer London properties reflects that central London properties are often well above the £600,000 Help to Buy Scheme limit, and are dominated by extremely wealthy cash buyers and overseas investors, while the crowded nature of the city prevents much new build activity. Bristol and Ilford also rank highly for first-time buyers in the south of England, with Harrogate the only location in the north of England ranking highly for first-time buyer mortgage applications. The top ten locations for highest demand for first time mortgages in 2013 are as follows:


Other top non-London locations include Southampton (ten percent), as well as Reading, Bromley, Carlisle and Guildford with nine percent. Towns and cities in the North and the Midlands have also seen rises, with Halifax recording seven percent and Birmingham seeing five percent growth.

Who are these mortgage applicants?

By segmenting these applicants using Experian Mosaic, a picture begins to emerge of the people who are looking into applying for first-time buyer mortgages. With applications increasing by 10 percent in the last year, the dominant type for making applications are younger, reasonably affluent professionals - whose key characteristics are as follows:

  • 18 - 40 year old university educated professionals who wish to live close to work in a mainly urban setting.
  • New trends identified by ongoing updates to Mosaic indicate that the profile of buyers from this group is aging in response to rising house prices
  • This group has a tendency to postpone establishing permanent partnerships and having children
  • The younger members of this group comprise of a large number of renters starting out on their careers, with more mature members beginning to look for their own properties
  • Key considerations for this group while they assess whether the time is right to purchase a property should be if their credit rating is adequate to ensure that they meet the criteria needed by the lender.

The wealthiest among the population, who live in the most sought after neighbourhoods, have also seen a 9 percent growth in applications. These buyers present an interesting case, with the high number of applications from this group perhaps indicating interest in buying to let, or wealthy families helping grown up children onto the property ladder. Key factors for this group are:

  • Middle aged professionals occupying senior management positions in well remunerated industries
  • Increasingly concentrated in locations such as Kensington, Islington and Notting Hill
  • Contains an increasingly high proportion of wealthy foreign nationals
  • Average personal salaries of c £105,000

The third placed type, with eight percent growth  are young, mostly single people on limited incomes renting small flats in towns and cities. Other key characteristics for this group include:  

  • Typically young (18-25) single people or young adults sharing a flat, not living in properties that suit families. Most common in inner London, Scotland, and larger cities in Northern England
  • Live in blocks of flats that sometimes have a negative image, but are increasingly home to young professionals renting from private landlords
  • As a group with more limited financial means, this group should take particular care of their credit history while they consider their options for purchasing a house

By pairing this demographic information with the locations of mortgage application data, we can ascertain that application location varies significantly depending on type:

  • Most wealthy - West London, Southampton, South West London, North London
  • Young, affluent professionals - Northampton, Hemel Hempstead, Bristol, Enfield, Guildford, Birmingham, Gloucester, Sheffield, Southampton, South East London, South West London
  • Younger single people - Dundee, West London, Nottingham, South East London, North West London, East London, Liverpool, South West London, Birmingham


Nigel Wilson, Managing Director, Experian Marketing Services, commented: "There has been an increasing pressure on those looking to buy their first property in recent years, with wages stagnating and house prices rising. This research demonstrates that groups within the UK population are still applying for first time mortgages, even if the latest data inputs to our new Mosaic system set to be released in Spring show that first time buyers are getting older as a general rule. The younger groups are also people that previous research from Experian has found need to take more control of their finances when thinking about housebuying. Those looking to market housing related goods and services need to understand the variety of people buying these homes and the differences in their motivations if they are to capitalise on the beginnings of a rebound in the housing sector."

Experian will be unveiling a new version of Mosaic in Spring 2014, which will offer new and unparalleled insight into demographic shifts in the population of the United Kingdom. Incorporating the latest Census data, Mosaic will offer insight into households, living patterns and the shape of our cities, to name but a few capabilities.

-Ends-

Contact:
Matthew Tubbs
Account Manager, Ruder Finn for Experian Marketing Services
02074383090
mtubbs@ruderfinn.co.uk

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.


About Experian Marketing Services
Experian Marketing Services is a global provider of integrated consumer insight, data quality and cross-channel marketing. We help organisations from around the world intelligently interact with today's dynamic, empowered and hyper connected customers. By coordinating seamless interactions across all marketing channels, marketers are able to plan and execute superior brand experiences that deepen customer loyalty, strengthen brand advocacy and maximise profits.


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