First-Time Buyer Numbers Up Again
The latest figures released for 2014 show that there has been a further rise in the number of first-time buyers entering the property market. This is the third consecutive year that the number has increased.
The research from the Halifax’s yearly First-Time Buyer Review shows that there was a 22% increase across 2014 in the number of people buying their first property. This compares well with the 23% increase seen in 2013 and shows that the market is still proving affordable for those at the bottom of the ladder.
In total, there were 326,500 first-time buyer purchases in 2014 and 268,500 for 2013. This figure for last year is the highest yearly level since 2007 and is 70% up on the numbers recorded in 2008. First-time buyers made up 46% of all purchases carried out in 2014 using a mortgage.
There are a number of reasons that have contributed to this continued growth in the numbers of first-time buyers. One of the major factors is that mortgages have now become more affordable, especially with interest rates still at record lows. Monthly mortgage payments now account for around 32% of a first-time buyer’s disposable income rather than the 50% we were experiencing in 2007. This has given new buyers more confidence to enter the market and buy a home with features such as a metal outdoor staircase or contemporary kitchen. They are able to do so knowing that there is a certain amount of leeway should rates rise in the near future.
House Prices Up but Lower Deposits
There was a rise in the average price of a first property in 2014. The typical cost went up to £171,870, which was a rise of 9% compared with the 2013 figure of £157,911.
However, this increase in property prices has been slightly tempered by the decrease in the level of deposits required by a first-time buyer. The average needed to secure a mortgage is now £29,218, which is down from £31,582. This is largely because there are now a higher number of mortgages on the market that need a smaller deposit. The market has also been aided by government schemes, such as Help to Buy, which were designed to assist first-time buyers.
First-time buyers are essential for a healthy property market. Following a successful three years, 2015 should continue to offer benefits for those looking to buy their first home.