First time buyers with mortgages now account for 50% of house purchases, the highest level since 2006, before the financial crisis.
The First Time Buyers 2018 report released by Yorkshire Building Society reveals that 367,038 mortgages were taken up by first time buyers last year, double that of 2008 and a slight increase on the 2017 figure of 362,800.
Schemes and other assistance such as Help to Buy, Stamp Duty relief, deals offered by house builders, good value loans and mortgage offers of 95% loan-to-value have all helped to achieve the record figures.
Despite climbing house prices, buying a home remains a priority for the young. 39% of those aspiring to buy said that owning a house was more important to them than anything else, including marriage and children.
Commitment to saving for a deposit is high, with 25% expecting to save for 5 years and 10% for a decade or more. 60% of successful first-time buyers had set up a savings account for the deposit prior to buying.
85% said that their reason for buying was to set up home with a partner.
Priorities that new buyers are looking for include the number of bedrooms (66%), size of the property (64%) and length of commute (60%).
Those needing help from family has doubled in the past five years from 4% to 10%.
Although conditions remain tough, new buyers aren’t being deterred.
Chris Irwin, Yorkshire’s senior mortgage manager, says: “While 5 to 10 years may feel like a long time saving, buying a house is one of the biggest financial commitments someone can make in life.
“With 1 in 5 recent buyers expecting to stay in their first home for 15 years or more, many are clearly looking for a longer-term or “forever” home. It’s good that potential buyers are considering what they want and need in a home and have clear aspirations to get a first house that meets their needs.”
Simon Bath, CEO of When You Move comments: “In some ways it is reassuring to see that so many young people are still looking to get on the property ladder despite the costs associated with a home purchase. For professionals in the property arena, this is an excellent opportunity to ensure that their portfolios are as accessible as possible to the new generation of homebuyers. Schemes such as Help to Buy and Shared Ownership have done this to a great extent, but the industry as a whole needs to be seen as aiding the most important transaction of their lives. One of the ways in which this can be done is through price transparency throughout the property transaction, ensuring that homebuyers are aware of the full extent of costs associated with their legal costs and the fees charged by the surveyor, before their services are engaged. Knowing these costs upfront ensures that first time buyers can budget and save adequately. Digitalisation in the home buying and selling process is also key for delivering a consumer focused service.”
Do you think the number of first-time buyers will continue to increase in 2019? If not, what do you feel will slow growth in this particular section of the market?