Halifax’s annual First Time Buyer Review indicated that there has been a 50 per cent climb in the number of FTBs in the last two years, with the typical deposit paid now seven per cent lower than it was in 2013.
This trend is likely to have been driven by the fact that mortgages are much more affordable these days and rates are lower than in the past. For the third quarter of 2014, the proportion of disposable income set aside for mortgage repayments by FTBs was 32 per cent, compared with the summer of 2007 when the figure peaked at 50 per cent.
Craig McKinlay, Halifax’s mortgages director, further explained that schemes introduced by the government such as Help to Buy have also done a lot to improve affordability, allowing even more FTBs to take their first step onto the property ladder.
“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,” he observed.
The reduction of stamp duty will also help to support FTBs this year, with those trying to get onto the ladder for the first time now able to take advantage of lower upfront costs – the amount paid on an average house has been reduced by £4,500 which is sure to be a serious boost for many.