Highest Level of First Time Buyers Seen Since 2007.

by Mark Johnston

Highest Level of First Time Buyers Seen Since 2007.

A new study of the UK property market in 2012 by the Halifax has found that the number of people buying their first home in 2012 was the highest since 2007.

There were around 216,000 first time buyers in 2012 up from 193,000 in 2011. Whilst this was the highest annual total since 2007 it was still nearly 50 per cent lower than in 2006 when the figure was around 402,800.

The Council of Mortgage Lenders  (CML) recently found that in mid-2012, 65 per cent of first time buyers had some type of financial assistance in 2012, compared to just 31 per cent seven years earlier in 2005.

Many lenders also noted that  there has been a “significant increase” in first time buyers getting financial help in recent years, with an estimated 65 per cent of first time buyers receiving assistance in 2012, which is more than double the 31 per cent in 2005.

It appears that the rise was due in part to more mortgages coming on the market.

It therefore seems that life is getting slightly easier for first time buyers, with high loan to value (LTV) mortgage deals now below 4 per cent.

Recent figures have shown an increase in the number of mortgage deals for those who can only manage a small deposit.

Across the market the number of 90 per cent loan to value (LTV) mortgages available has risen from 242 in August, when the Funding for Lending scheme started, to 258 now, and the average rate has fallen from 5.33 per cent to 5.21 per cent. The number of 95 per cent deals has also crept up from 26 to 32, though the average rate on these is almost unchanged at 5.83 per cent. These figures are according to analysis by moneysupermarket.com, a comaprison website.

A stagnant housing market has also meant that new buyers can get a better deal, that is as long as they want to live in the north of England or Scotland.

People taking their first step on the property ladder will find homes within their means in 54 per cent of local authority districts, the highest proportion since 2002 when 64 per cent of districts were within buyers’ reach.

The share of UK towns and cities that are affordable to first time buyers is at its highest in a decade due to the sluggish housing market, a study has found.

Over half (55%) of all first time buyer purchases in 2012 were below the £125,000 stamp duty threshold.

Nevertheless, Martin Ellis, housing economist at Halifax, suggested: “The number of first time buyers has risen to a five year high. Conditions for potential first time buyers, however, remain very difficult with problems raising the necessary deposit and concerns over the economic climate continuing to prevent many from entering the market.

Other industry experts also warned that aspiring home owners still face “significant hurdles” amid the uncertain economy, despite some positive steps with schemes such as New Buy, the numbers of those buying their first home remain low by recent historical standards.





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