Boost in first-time buyers - Mortgages - News - Moneyfacts


Boost in first-time buyers

Boost in first-time buyers

Category: Mortgages

Updated: 28/01/2016
First Published: 28/01/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Last year was incredibly positive for the mortgage market as a whole, and happily, it seems that a key sector was able to benefit – first-time buyers. The combination of record low mortgage rates, improved affordability and greater choice for small-deposit holders meant that a growing number of people were able to take that first step on the ladder, and new figures show how different the market has been for them.

Growing proportion of the market

The research, from, shows that 2015 was a particularly strong year for first-time buyers (FTBs), with 43% of all buyers being first-timers – up from 37% in 2014. In even better news, it seems that things are becoming far more affordable, with the gap between the average price they paid for their home and that paid by buyers already on the property ladder rising, too.

In 2014, the average price paid FTBs was 79% of that paid by other buyers, but last year this figure dropped to 75% of average prices: new buyers paid an average of £202,000 for their first home, far less than the average house prices paid by other buyers (£269,000). The average price paid by FTBs still rose year-on-year, as expected given the level of price inflation in the market at large, but the average increase of 4% is still well below the price increase of 10% that other home buyers were faced with.

Improvements are still needed

Rob Houghton, CEO of, is encouraged by the growing number of FTBs, but is concerned that the pace of price increases means that certain parts of the country will be almost entirely out of reach for those yet to take the first step on the ladder: "It's good to see the increase in first time buyers, although large areas of the country remain prohibitively expensive for many," he said. "Until planning regulations are changed to allow more properties to be built, we don't see much prospect of a significant change in this."

It's hoped that recent Government initiatives – such as the commitment to build more new homes and the launch of the Help to Buy ISA – will both encourage new buyers to get on the ladder and ensure that house prices don't become prohibitive for them, but for the time being, the best possible way to ensure you can truly afford to take the first step is to take a close look at your finances.

Having a decent credit score is a must if you want to secure a mortgage, so start the process by heading to a credit check provider (such as Experian Credit Expert ) to see if there are any improvements to be made. Remember that mortgage providers will go through your finances in detail, so make sure everything is up to scratch – don't spend money unnecessarily and make cutbacks whenever you can – and you'll want to build up as much of a deposit as you can. Then it all comes down to finding the right mortgage, which can ensure your repayments remain affordable. Happy house hunting!

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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