First-time buyer numbers soar | moneyfacts.co.uk

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Tim Leonard

Tim Leonard

Finance Expert
Published: 03/01/2019

More first-time buyers took their first step onto the property ladder in 2018 than in any year for over a decade, new analysis has revealed.

Just a few weeks after we reported how the mortgage rates on offer to first-time buyers had fallen to a record low, separate figures from Yorkshire Building Society show 367,038 first-time buyers secured mortgages in 2018, up from 362,800 in 2017.

The research also reveals that the number of first-time buyer mortgages
has exceeded 2007 levels, when 359,900 first-time buyers took out mortgages, and is almost double the 193,300 taken out in 2008 - when the financial crisis first hit the housing market.

Just how important first-time buyers currently are to the housing market is further illustrated by the finding that half of all homes bought with a mortgage last year were sold to those buying their first property – the highest proportion since 1995.

With the mortgage rates on offer to first-time buyers having dropped to a new low last month, that 2018 has been such a positive year for first-time buyers should not really come as much of a surprise.

Indeed, according to the December Moneyfacts UK Mortgage Trends Treasury Report, the average mortgage rate available to those with a 5% deposit (95% loan-to-value) fell by 0.09% during the month to 3.54%. Just a year earlier, the typical rate had stood at 4.15%.

At the same time, the report revealed how the availability of first-time buyer mortgages
had notably improved, with 304 mortgages available to those with a 5% deposit, up from 217 a year earlier and a barely believable 17 in 2008.

Even though property prices have grown at a faster rate than wages over the past 12 years, making it more difficult for first-time buyers, Nitesh Patel, strategic economist at Yorkshire Building Society, said various factors, including Government initiatives such as Stamp Duty relief, Help to Buy equity loans and Help to Buy ISAs, have helped to ease their path.

"Over the past three or four years, we've also seen more mortgage lenders offering 95% loan-to-value mortgages, as well as strong competition driving mortgage rates down," he added. "This combination of factors has made buying a home more accessible in recent years."

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