First-time buyers at highest level since 2007
The number of first-time buyers rose to its highest level in seven years in 2014, research from the Halifax has found.
Its First-Time Buyer Review estimated that 326,500 people bought their first property last year - the highest annual total since 2007 and a jump of 22% compared to 2013 when just 268,500 homes were purchased.
The average deposit for first-time buyers fell in 2014, with people putting down an average of £29,218, a drop of 7% compared to 2013 (£31,582); while the proportion of earnings buyers put towards their mortgage repayments stood at an average of 32% in the third quarter of 2014 - a substantial drop compared to summer 2007 when the figure was 50%.
Halifax said the combination of record low mortgage rates and government schemes like Help to Buy had helped first-time buyers get on the property ladder. It is the third annual increase in first-time buyers recorded by the building society.
However, the average price first-time buyers are paying is up 9% on 2013, with the average first-time buyer property now costing £171,870.
The average age of those buying for the first time has also risen, from 29 in 2011 to 30 in 2014; though the average age of those buying in London is highest at 32.
Boost in confidence
Craig McKinlay, mortgages director at Halifax, said: "First-time buyers are vital for a properly functioning housing market. 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.
"Record low mortgage rates and Government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property."
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.