First-time buyer (FTB) figures reached their highest levels since 2007 in 2019.
According to data obtained from the Yorkshire Building Society (YBS), the 353,436 FTB homeowners in 2019 marginally exceeded the pre financial crash levels of 353,130 buyers in 2007.
The statistics also suggest that buyer activity amongst FTBs is consistently at pre-crash levels with a five–year average of over 300,000 FTBs obtaining a mortgage in the final five years of the last decade.
The figures represent a 2% increase on 2018 and 16% rise when compared with 2015’s FTB numbers. Despite Brexit uncertainty, 51% more FTBs were able to obtain a mortgage in 2019 than they were at the start of the financial crisis in 2008.
Since 2016, FTBs have remained the backbone of the property sector, accounting for 51% of all transactions using a mortgage.
Nitesh Patel, Strategic Economist, said:
“Even though the number of first-buyers has stayed pretty much the same as last year, it is still encouraging to see first-time buyers top 350,000 for the second year in a row. They also represent over half of all homes bought with a mortgage, meaning the first-time buyer mortgage market share is at its highest since 1995, when they bought 53% of all mortgage-financed homes.
“First-time buyer numbers may now be plateauing as property prices have grown at a faster rate than salaries over the past 12 years. This means larger deposits are needed to get on to the property ladder, leading to challenges and barriers to homeownership, which are most pronounced in London and the south-east.
“In recent years first-time buyers have been helped by strong competition driving mortgage rates down to near-record lows, making borrowing more accessible. More mortgage lenders offering 95% loan-to-value mortgages, which reduces the need for a higher deposit. Home loans with terms of up to 40 years are becoming increasingly popular as first-time buyers look to lower their monthly mortgage repayment.
“Also, Government schemes such as Stamp Duty relief, Help to Buy equity loans and Help to Buy ISAs will have made an impact. This combination of factors has made buying a home more accessible in recent years.
“This has seen the first-time buyer market bounce back from the financial crisis and perform better than other sectors, such as the home-moving and buy-to-let markets. However, as these figures show the market may have now reached its peak and buying your first home still remains tough for many.”
Will the property sector continue to grow in 2020?
One Response
Is back where we were after 12 years success or failure?