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Tembo Insights Report: Jan-Jun 2021

Today at Tembo, we're launching the results of our impact and customer insights report for the first half of 2021. Through analysing the data of 2,432 Tembo users from 1st January to 30th June, a few shocking figures (and some less surprising) emerged.

The story this data paints shows the scale of the generational wealth gap, the challenge faced by would-be first-time buyers and highlights to what extent home ownership can offer buyers a stable financial footing in the world.

Here are the headlines.

Baby boomers earned more from house price increases than first-time buyers earned in income

Yep, you read that right. As property prices have soared in 2021, existing homeowners have seen their homes go up and up in value. Digging into our 'booster' data reveals some surprising insights. If you're not quite caught up with the Tembo lingo, a booster is a homeowning parent or grandparent looking to help their younger generations join them on the property ladder.

The average Tembo booster's home is now worth £398,000. Based on 6.3% annual growth in house prices this equates to a cash gain of £24,000. That's an average of £180 per day from property gains alone.

By comparison, aspiring first-time buyers who are struggling to get on the property ladder have earned an average of £17,000 in income over the same period. That's just £130 per day.

We can therefore conclude that over 55's have earned 40% more - simply by merit of owning a home - than first-time buyers have earned in the workplace.

So it's no surprise that:

First-time buyers continue to face a monumental challenge, with house prices averaging 7x earnings

Tembo's customer data shows that the average property price a first-time buyer is looking at purchasing sits at £225,000, while average income among our buyers is £34,000. With most banks lending around 4.5x income, it's clear that the average buyer faces a seemingly impossible task.

Our findings echo The Resolutions Foundation's Intergenerational Audit, which reported that 10% of 18-29 year-olds owned their own home in 2020, compared to 25% in the same age bracket in 1979. They went on to say: "Factors such as the long-term shift towards renting... and the increasing concentration of Britain's growing stock of household wealth at older ages have all similarly determined... the youth bias that we expect to see in the more enduring challenges."

After all that, here's some good news.

Current average savings for a first-time buyer's deposit sit at £26,000

As a nation we’ve been spending less in lockdown. The Bank of England shows that during lockdown in 2020, consumers accumulated more than £125bn extra than they would in a normal year, and balances were expected to rise substantially in the first half of 2021. This is reflected in the great savings Tembo buyers have put away. 

But while £26,000 is not to be sniffed at, with the average first-time buyer deposit sitting at around £59,000, it’s clear that an uphill climb remains. 

So how can Tembo help?

This data shows that the challenge of buying your first home is only getting steeper. It's no surprise then that 68% of Tembo users were unable to buy a property without the help of their loved ones. Our range of innovative family mortgages are helping first-time buyers get on the ladder faster and for less. Create a plan today to see how our specialist mortgage brokers could help you.

Key data

1. Average annual income for the buyers that Tembo is helping is £34k

2. Average property price that they are looking to buy is £225k

3. Average deposit that they have saved so far is £26k

4. Average booster home value is £398k

5. Average house price increase January-June 2021 – 6.3% 

6. 68% of users were unable to afford to buy their property without a Tembo Boost 

Based on 2,432 Tembo Money users 1 January - 30 June 2021

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