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First-time buyers spurring on housing market with increasing completions and mortgage lending

The first-time buyer mortgage market share has reached its highest ever level as the number of buyers taking their first steps onto the property ladder reaches the highest level since 2006.

According to data from the Yorkshire Building Society, just over 367,000 first-time buyers entered the market with the help of a mortgage to 2018 – nearly double the number in 2008.

The sharp rise in first-time buyer activity means that half of all homes purchased last year was done so from this group.

Strategic economist at Yorkshire Building Society, Nitesh Patel said of the news that: “The first-time buyer market has bounced back following the financial crisis to out-perform other sectors, such as the home-moving and buy-to-let markets.

“Buying your first home remains tough for many, but it’s encouraging to see first-time buyer levels at a 12-year high and climbing.”

The number of first-time buyers entering the property market has increased steadily since 2015, supported by the advent of Help to Buy and the growing prominence of the ‘bank of mum and dad’ to offer initial financial support to raise deposits and in some cases guarantee mortgages against family homes.

First-timers backed by competitive mortgage deals

And it’s not just Help to Buy and increasing wages that have helped first-timers get into the market. Over a period where house price growth has regularly outstripped wage growth, high street lenders have also offered more 95% mortgage products to support first-timers looking to buy outside of Help to Buy schemes.

As a result, lending to those group increased 9% over 12 months to November 2018 with £6 billion in new lending.

Director of mortgages at UK Finance, Jackie Bennett noted that: “A mixture of competitive deals and schemes including Help to Buy saw even more first time buyers get a foot on the housing ladder during November.”

Read more: Housing market becoming more affordable for buyers as wages rise

But whilst the figures are certainly moving in the right direction, there are still challenges for would-be home buyers, including tougher affordability rules despite many first-time buyers likely to see a reduction in total housing outlay through a mortgage as opposed to renting.

However, with the extension of the Help to Buy scheme until 2023, and also the option to buy a smaller portion of a property through Shared Ownership, there’s still plenty of time and good buying options for those dreaming of buying their first home sooner rather than later.