2013 sees first time buyers flying onto the ladder
The number of first time buyers in the first six months of 2013 was 19% higher than in the same period last year, according to the half-year Halifax First Time Buyer Review.
There were an estimated 120,000 first time buyers (FTBs) during January-June 2013, up from 101,000 in the first six months of 2012; the highest total for the first six months of the year since 2007 (181,500). This continues the trend seen last year when there was a 13% increase in the number of FTBs between 2011 and 2012.
FTB numbers also rose by more than the total number of house purchasers, increasing their share of the home purchase market from 40% in the first half of 2012 to 44% in the same period this year. This was the highest proportion since 2000. (See Table 1)
Mortgage affordability has also improved significantly in recent years. The proportion of disposable earnings devoted to mortgage payments by first-time buyers stood at 27% in 2013 Quarter 2; nearly half of the peak level of 50% in Q3 2007 and comfortably below the long-term average of 36%2.
Craig McKinlay, Mortgages Director at Halifax, commented:
“The increased availability and reduced pricing of higher loan-to-value mortgages introduced over the past year or so have clearly contributed to the number of first time buyers rising to a six year high. Government schemes, such as New Buy and Help to Buy, are also enabling more first-time buyers to enter the market.
"The significant increase in first-time buyers is encouraging, although the number of those buying their first home still remains low by recent historical standards. While conditions remain difficult, with problems raising the necessary deposit and concerns over the economic climate preventing people from entering the market, we remain committed to continuing to offer support designed specifically for first time buyers, ensuring even more people can take their first steps onto the property ladder.”