A study by LSL Property Services found that in March there were over 31,400 new home owners – the highest monthly figured recorded since August 2007, giving us a seven year high.
The figure has been boosted by the Help to Buy government scheme that was introduced last year, enabling those who could not previously afford a deposit to get onto the property ladder. It was the first-time buyers who led the mortgage resurgence back in 2013, taking the largest portion of the property market for the first time since the start of the century.
Paul Smee, Director General at CML, says:
"First-time buyers were an especially important factor in driving the market forward in 2013 as improved economic conditions, as well as the introduction of government schemes like Help to Buy, have given the opportunity for them to enter the market and become homeowners."
Figures from Your Move and Reeds Rain have shown that the deposit of first-time buyers has fallen by around 10% down to £23,802 over the last year, making it the lowest deposit for first time buyers in over three years.
In previous years, the average deposit that a first-time buyer would use to buy a house would represent around 77% of their income, but now that figure has dropped down to around 66%.
Director of Your Move and Reeds Rains, David Newnes, said of the situation:
“The number of first-time buyers has returned to a pre-recession high, just in time for the one year anniversary of Help to Buy. More first-time buyers are seizing the opportunity to have a helping hand from the Government in putting together a deposit. Help to Buy has allowed the bottom of the market to stay buoyant, despite property prices increasing.”
The Council of Mortgage Lenders has found that even though there was the usual seasonal dip in the amount of people moving and buying at the beginning of 2014, figures have still stayed above 30% more than at the same time a year ago.
The property market is continuing to thrive, with an increase in buy-to-let investors and on-going remortgaging activity making it a strong year in terms of lending levels and buyers. The momentum in the housing industry is definitely picking up at a good pace.
Studies have found that the average house price paid by a first-time buyer has increased by over 6% in the last year alone, which means an additional £7,781 is being spent on houses since March 2013. Even with this increase however, mortgage repayments have stayed the same.
Across London, the average deposit that a first-time buyer pays is around £68,000 – over double the average amount for the rest of the UK. But this has not put people off buying in the capital, with 12,700 houses sold to first-time buyers in London just in the first three months of this year.
In terms of the cheapest places a first-time buyer can secure a house, then Northern Ireland actually comes in at the top in terms of lowest house prices at just £90,816. The lowest deposits found were in Yorkshire and the Humber where buyers paid around £15,280 to secure a property.
With the impending crack down on mortgage applications, it will be interesting to see how this affects the number of first time buyers jumping onto the property ladder. They will now have to pass a series of questionnaires and interviews to even be approved for a loan.