A Year in Review: Mojo Mortgages' 2024 Insights

Stepping onto the Ladder: First-time Buyer Trends

In 2024 first-time buyers faced fluctuating mortgage rates, which, although improved since mid-2023 at its peak, still remained higher than in previous years. 

Affordability was also a concern as salary growth struggled to keep pace with inflation and rising property prices. 

The government is set to launch the Freedom to Buy scheme, which aims to make homeownership more accessible by offering 5% deposits. However, few details have been confirmed so far.

At Mojo Mortgages, we've seen a 20% increase in first-time buyers seeking our help in 2024.

Out of all of our first-time buyer customers this year, over half (50.8%) were between 25 and 34 years old, aligning with the UK’s national average first-time buyer age of 33 years old and 8 months.

We've also compared this year's average deposit, loan amount, initial mortgage repayment and mortgage term for our first time buyer customers to last year.

• Lower deposits - This likely reflects tighter budgets due to inflation or a push to buy with less savings, possibly supported by home ownership schemes encouraging low deposits. In fact, there's been a 2.36% rise in our first-time buyers securing a 95% mortgage this year compared to last year.

• Higher loan amounts - Up by 5.8%, showing first-time buyers are borrowing more to cover the gap from smaller deposits and rising property prices.

• Higher initial mortgage repayment - Reflecting the impact of higher borrowing amounts and higher interest rates, even as they begin to stabilize.

• Longer average mortgage term - Slightly extended, from 29.3 years in 2023 to 29.9 years in 2024 which helps reduce monthly payments to manage affordability.

We've also compared Mojo Mortgages' first-time buyers and home movers in 2024. 

First-time buyers are purchasing their first property, while home movers are buying a new home but have owned property before.

• Home movers are able to provide larger deposits, likely due to the equity from their current properties.

• Home movers usually take out larger loans because they tend to buy higher-value properties. This is also linked to their ability to make bigger deposits, which lowers the risk for lenders.

• While home movers borrow more, their monthly payments are only slightly higher than first-time buyers'. This could be due to shorter loan terms, better mortgage rates, or more favourable lending conditions.

• First-time buyers often choose longer mortgage terms to lower monthly payments and improve affordability. While home movers prefer shorter terms to pay off loans faster and reduce interest.

Overall, first-time buyers face steeper challenges when it comes to saving for a deposit and managing higher loan-to-value (LTV) ratios, while home movers benefit from built-up equity, allowing them to secure larger loans. This highlights the difficulty of getting onto the property ladder, and we’re proud to have supported 20% more first-time buyers in overcoming this hurdle in 2024.

Switching To Save: 2024 Remortgaging Trends

In 2024, 1 in 7 (14.5%) of Mojo Mortgages customers remortgaged specifically to fund home improvements. Remortgaging is a popular way for homeowners to get their hands on extra funds for purposes like home improvements. By switching mortgages, homeowners can use equity built up on their property. This is usually a cost-effective approach for homeowners as mortgage rates can be lower than personal loans or credit cards. 

Remortgaging for home improvements can be a flexible option, but it’s important to check if you can afford the higher repayments and whether the upgrades are worth the cost. Speak to a mortgage broker like us to see if it’s the right choice for you.

In 2024, 48% of Mojo Mortgages customers who remortgaged opted for a product transfer, while 52% chose to switch lenders. A product transfer is when you remortgage with the same lender to a new mortgage product, usually at the end of a fixed term. Many choose to do this because it’s quick, simple, and often has fewer fees than switching lenders. Plus, it typically doesn’t require an affordability check or property valuation, making it convenient for those who may struggle to qualify elsewhere.

While product transfers can be more straightforward, switching lenders can offer more competitive mortgage rates or terms. The best option depends on your personal situation, so we recommend speaking to our mortgage experts to find the right choice for you.

Mortgage Rates and Deals: What Was Trending in 2024?

Fixed vs variable-rate mortgages:

When choosing a mortgage, borrowers opt for a fixed-rate or variable-rate mortgage depending on their financial situation.

Fixed-rate mortgages come with a set interest rate for a specific term, keeping monthly payments predictable. This makes them a popular choice, especially in uncertain economic times. In 2024, an overwhelming 95% of Mojo Mortgages customers opted for fixed-rate mortgage deals, reflecting a strong preference for stability. The remaining 5% chose variable-rate mortgages, including tracker, discount, and standard variable rate options.

Of the fixed-rate mortgages, the majority of Mojo Mortgages customers (68.8%) chose a 2-year fixed-rate mortgage, likely due to its lower rates and flexibility. A smaller percentage (30.9%) went for a 5-year fixed rate, while only 0.26% selected a 10-year fixed rate. 

Variable-rate mortgages have interest rates that can change over time, often tracking the Bank of England base rate or the lender’s standard rate. This includes:

• Tracker mortgages - Chosen by 4.86% of Mojo Mortgages customers, this type of mortgage follows the base rate and can offer lower payments when rates are low, though they may increase unexpectedly.

• Discount mortgages - Selected by only 0.09% of Mojo Mortgages customers, offer a discount off the lender’s standard rate for a fixed period.

• Standard variable rate (SVR) mortgages - The least popular at 0.04%, provide flexibility but typically have higher and more unpredictable mortgage rates.

The lowest and highest rates for 2-year and 5-year fixed mortgages in 2024 across all LTV’s from the Big Six Lenders:

The lowest rates for both 2-year and 5-year fixed mortgages were on October 4th, 2024, while the highest rates occurred on January 1st, 2024.

Mortgage rates have fluctuated throughout the year, but we’re beginning to see signs of stability. Borrowers with a longer-term outlook found better value in 5-year fixed rate mortgage deals, locking in lower rates compared to shorter-term options. However, longer-term mortgage deals have early repayment charges if you exit early, so consider your future circumstances before committing.

Home-buying Insights: 2024 Regional and Property Trends

• East Midlands - 9%

• East of England - 9%

• Greater London - 14%

• North East - 8%

• North West - 15%

• Northern Ireland - 1%

• Scotland - 9%

• South East - 12%

• South West - 8%

• Wales - 5%

• West Midlands - 10%

Most of our customers bought property in London (14%), while Northern Ireland (1%) had the fewest buyers. This is likely due to population size, with London being the UK's largest population center and Northern Ireland as one of the smallest.

Houses (84%): Most Mojo Mortgages buyers purchased a house, showing a clear preference for bigger spaces, more privacy, and the bonus of outdoor areas. It reflects the ongoing demand for family-friendly homes and extra room - especially since the rise of remote work during the pandemic.

Flats (14%): Flats were the second most popular choice, accounting for 1 in 7 of mortgages in 2024. Typically groups who would opt for flats may be first-time buyers, young professionals, or those in urban city areas where houses are less affordable.

Other (2%): This category covers non-traditional or unique homes like bungalows and custom builds. It shows that there’s still a small interest in purchasing alternative properties.

At Mojo Mortgages this year, we’ve seen the highest peak in home-buying activity in October. 

Autumn was the busiest season, accounting for over a third (36.4%) of all approved mortgages. This seasonal popularity can be attributed to a number of factors, such as buyers aiming to settle before year-end and the Christmas festivities begin. Young families may also prefer to move during Autumn to align with the school calendar, avoiding disruptions mid-year. 

However, it’s important to note that this analysis covers data from January 1 to November 24, meaning the full picture for November and December isn’t included. So while autumn is in the lead, the complete data could slightly shift the seasonal breakdown, especially for winter purchases.