First-time buyers levels back to pre-credit crunch
The number of first-time buyers has returned to pre-credit crunch levels across the UK, with London leading the way, new figures show.
A breakdown of figures from the Council of Mortgage Lenders (CML) released today show the capital housed 37,300 first-time buyers in 2012, a 15% increase on 2011, whereas the rest of the UK saw a 12% increase.
Data from the government's Right to Buy scheme, where tenants can be offered discounts of up to £75,000 of the value of their home, also released today show the number of sales doubled from 1,041 between July and September last year to 2,010 between October and December, the highest number of sales since 2007.
Housing minister Mark Prisk said the scheme had "opened the door to homeownership" for thousands of tenants.
Although first-time buyer numbers in the capital are the strongest in the UK, affordability was at its tightest in London where buyers borrowed an average of 3.59 times their income in the fourth quarter of 2012 and their mortgage payments were typically 21% of their income – compared to 3.26 and 20% for the rest of the UK.
Across the UK 40% of first-time buyers typically bought properties for less than £125,000, while in London only 4% of people fell into this band, with 47% of Londoners purchasing properties worth between £125,000 and £250,000.
Scotland saw its number of first-time buyers rise to 2008 levels with 19,000 first-time buyers in 2012, a 13% increase on 2011, and Wales saw its number of first-time buyers hit 2007 rates with 2,500 loans worth a total of £240 million advanced to first-time buyers, up 14% on the last quarter of 2011.
Paul Smee, director general of CML, said today's figures showed signs of confidence returning to the market.
"Even though property in London remains more expensive than the rest of the UK, low interest rates and in the increased availability of high loan-to-value mortgages for borrowers with smaller deposits has enabled more aspirational homeowners to enter the market than any time in the last five years," he said.