More first-time buyers bought a house in 2014 than in any other year since 2007, according to data from the Halifax.
Indeed, the bank suggests that around 22% more people took a step on to the property ladder last year than in 2013, with approximately 326,000 people managing to secure their first homes. In fact, nearly half of all mortgages taken out last year were given to first-time buyers.
The new figures indicate that buying property, which became only a dream for some following the 2007 crash, is becoming more affordable again. Mortgage rates have reduced and the Government has pumped money into schemes such as Help to Buy, allowing first timers to purchase property with smaller deposits.
“First-time buyers are vital for a properly functioning housing market,” says Halifax’s mortgages director, Craig McKinlay. “Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first-time buyers in the past two years”.
However, house prices also rose markedly over the last year, to around 8.5% higher than in 2013. Nonetheless, thanks to more favourable mortgage deals, the average deposit has dropped by 7%, according to the Halifax, which accounts for the increasing affordability of houses, despite property price rises. Most youngsters now spend around a third of their incomes on a mortgage, whereas in 2007, the figure was nearer to 50% of a first-time buyer’s wages.
Prospective purchasers still have to find around a £29,000 deposit in order to secure a deal, though, which is a hefty sum, considering that this amount represents more than a year’s earnings for many twenty- and thirty-somethings.
It is also notable that the market cooled significantly towards the end of last year, thanks, no doubt, to stricter lending rules coming into force. 2015 might not be as much of a bumper year for property purchasing, therefore—but only time will tell. Other factors, such as the new stamp duty rules and a slowdown in property price increases, may keep the market moving.
So, how old is the average first-time buyer nowadays? Statistics show that most people get on the property ladder at the age of 30—up slightly from an average of 29 in 2012. In London, with those ever-rocketing property prices, first-time buyers have to wait a little longer, managing to stump up a deposit at a typical age of 32.
Posted by Stacie on October 13th, 2016
Posted by Stacie on October 13th, 2017
Posted by Laura on June 17th, 2015