The continued rise of house prices has no doubt made it difficult for first-time buyers to take that all-important first step, but happily, many appear to be taking the plunge, with the combination of low mortgage rates and improved affordability having a positive impact.
The latest Halifax First Time Buyer Review shows that the number of first-time buyers (FTBs) increased by an estimated 10% in the first six months of 2016 compared with the same period a year ago, with some 154,200 FTB transactions being recorded. This is a notable rise from the 140,500 transactions that took place in the first six months of 2015, and means that first-timers now account for an estimated 47% of all mortgage-financed house purchases.
This is despite the fact that average house prices have risen notably over the same period – the figures show that the average price of a home bought by FTBs rose by 12% year-on-year to stand at £199,414. The average deposit reflects this, with the typical amount put down rising by 14% to stand at £33,960. This means that the average FTB deposit now equates to around 17% of the typical purchase price, down from 20% in 2013, no doubt helped by the rise in high loan-to-value (LTV) mortgages.
Chris Gowland, mortgages director at Halifax, said that the overall rise in FTB numbers "has been broadly in line with a general improvement in market activity, and is likely to have been helped by Government measures including the Help to Buy scheme… record low mortgage rates continue to make buying seem a more attractive option than renting".
He added that the total number of FTBs has exceeded 100,000 in the first six months of each year since 2012, which shows that, despite house prices rising rapidly, the market is well and truly open for business to first-time buyers.
Could now be the perfect time to take that first step on the ladder? It certainly seems to be, with low mortgage rates and a huge number of first-time buyer mortgages available creating the ideal combination. If you're thinking of taking the plunge, start the process by looking at our mortgage best buys to find a deal that can keep your repayments in check.
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