Mortgage blog: Number of first-time buyers rises by biggest margin in a decade

Posted 17 January 2014

New figures from one of the UK's leading lenders have revealed that the number of first-time buyers rose by over one fifth in 2013, the strongest annual increase in a decade. The Halifax findings show that there were around 265,000 first-time buyers in the UK in 2013, representing the highest total since the global financial crisis.

However, many potential first-time buyers are still finding it hard to raise the necessary deposit that they need to obtain a mortgage, despite the introduction of the Help to Buy scheme.

Number of first-time buyers up by 22% in 2013

Halifax used a combination of Council of Mortgage Lenders' figures and its own and their findings revealed that the number of first-time buyers in the UK rose by 22% in 2013, from an estimated 218,000 in 2012. This is the biggest annual rise since 2001.

The increase also meant that first-time buyers increased their share of all house purchases made with a mortgage, now accounting for 44%, up from 40% in 2012.

Housing Minister Kris Hopkins said: "I'm pleased to see that our efforts to help aspiring homeowners and restore the health of the housing market are reaping results, with the biggest increase in first-time buyers for a decade. Already, our Help to Buy schemes have helped over 26,000 people without a large deposit to get on the housing ladder, while our work to cut the record deficit we inherited has helped keep interest rates low and homeownership at its most affordable for six years."

Low mortgage rates helping first-time buyers to get onto the housing ladder

The Halifax figures also showed how low interest rates have helped to improve mortgage affordability since the global financial crisis. The proportion of disposable earnings devoted to mortgage payments by a first-time buyer stood at 30% in the last three months of 2013, compared with a peak of 50% in the summer of 2007.

Martin Ellis, a housing economist at Halifax, said: "Low interest rates, improvements in consumer confidence and government schemes, such as Help to Buy, all appear to have contributed to the rise in the number of first-time buyers.

"However, many potential first-time buyers continue to find raising the necessary deposit a problem. The Help to Buy mortgage guarantee scheme should enable more buyers to get on to the property ladder with smaller deposits. Continuing pressure on household finances during the next 12 months will no doubt remain a constraint."

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