A £22.3 billion increase in spending on house purchases in 2024 was driven by a £24.3 billion increase in the use of mortgage debt.

This was a rise of 18.1% according to property consultancy Savills, which drew up the analysis.

But while the equity put down by mortgaged buyers rose by £6.3 billion (up 9.5%), spending among cash buyers fell by £8.4 billion (5.4%), meaning cash and equity fell to 58% of the total spend on housing.

The greatest increase in mortgage debt was among first-time buyers (up £12.2 billion or 21.4%), which was fuelled by higher transaction levels and a slight easing in the average loan-to-value.  

“The rise in first-time buyers reflects the overwhelming desire of Britons to get a foot on the housing ladder. Especially given the lack of choice in the private rented sector, and the double-digit rental growth tenants have experienced over the past few years” comments Lucian Cook, head of residential research at Savills.

“As a result, those who have been able to pull together a deposit have continued to take the plunge, despite higher house prices and mortgage rates.”

He continues: “Clearly with ambitious housebuilding targets, the government would like to see a stronger recovery in the size of the housing market. With constraints on public finances, it looks like that will need to be rooted in relaxation in mortgage regulations to further increase first-time buyer activity.  

“Meanwhile, an improvement in activity among home movers is heavily dependent on further cuts in interest rates and an improvement in consumer confidence,” adds Cook

Year-on-year comparison in total housing spend

Source: Savills using data from the Regulated Mortgage Survey, HMRC and the Mortgage Lenders Administrative Returns