First-time buyers now account for half of all new mortgages

The number of first-time buyers increased again in the first half of 2018, with 175,500 people taking their first steps on the property ladder. As a result, over half of new mortgages agreed are with first-time buyers.

Despite the news surrounding the difficulties prospective new homeowners are finding getting onto the property ladder, the latest statistics, released by Halifax, indicate that in just one of the last seven years has the number of first-time buyers dropped.

The bank noted in its report that “their [first-time buyers] share of [the mortgage business] has picked up since Help to Buy was introduced in 2013”.

It’s positive news for those who may have been put-off attempting to buy their first home, potentially influenced by the amount of news they’d have read suggesting the market is too difficult for first-timers.

Russell Galley, managing director of Halifax said that: “While the pace of employment growth has recently slowed, a low unemployment rate and a gradual pick up in wage growth are helping to support household finances.

“This has been accompanied by interest rates still remaining at a historically low rate and a stable yet constrained supply of new homes onto the market further supporting house prices.”

Growth built on record 2017

The continued growth of new property owners entering the market is a positive reflection on the strength of demand and affordability in conjunction with Help to Buy and related schemes.

In 2017, the number of first-time buyers reached an 11-year high with 365,000, the highest number since the financial crash.

For the number of new mortgages to just about keep pace with the record growth of last year in H1 2018 indicates that, despite ever-increasing house prices, the confidence and ability of first-time buyers to enter the market is continually improving.

Options available to first-time buyers

Probably the biggest hurdle facing first-time buyers is the ability to raise a substantial deposit, something which new government-backed schemes and creative mortgage products from high-street lenders has looked to address.

Alongside pausing Stamp Duty for properties worth up to £300,000, helping first-time buyers save up to £15,000 already, the number of low-deposit mortgage and purchase options available have all proven popular.

Read more: Help to Buy moves over 420,000 onto the housing ladder

These include Help to Buy: Shared Ownership whereby prospective owners can purchase a percentage of the property and pay rent on the rest. This option has proven popular for those prospective buyers on smaller annual incomes or with credit issues.

Also, the Help to Buy ISA has helped those dedicated to saving as much as they can maximise what they can put down on a mortgage, whilst the 5% deposit with Help to Buy shared equity loans are helping those with a smaller lump sum ready to put down against a property make a move sooner than they would have been able to historically.

And finally, there are a number of so-called ‘family link’ and guarantor mortgages available from high-street lenders where a second owned property from a family member can be used as security against the first-time buyer mortgage.

Find out more about these options here.