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First-time buyer sales remain above 300,000

First-time buyer sales remain above 300,000

Category: Mortgages

Updated: 11/01/2016
First Published: 11/01/2016

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 It is now over 6 months old so the content may be out of date.

2015 proved to be a great year for first-time buyers, with the combination of record low mortgage rates, real terms wage growth and rising employment meaning that a huge number of people were able to take that first step on the housing ladder – 310,000 of them, in fact – and the future looks just as bright.

A healthy market

The latest Halifax First-Time Buyer Review shows that the number of first-time buyers (FTBs) totalled an estimated 310,000 last year, which although represents a marginal decline of 0.5% from the 311,700 FTBs recorded in 2014, marks healthy growth on a longer-term basis and is the second consecutive year that the number has surpassed 300,000.

Indeed, the number of FTBs has grown by 60% since 2011 when 193,700 such sales were recorded, and this year's slight decline (which, incidentally, marks the first annual decline since 2011) is in line with overall house purchase figures, the report noted, and is partly due to a shortage of suitable homes for sale.

The figures also revealed that the average price paid by first-time buyers rose by 10% in 2015, up from £172,563 to a new record of £190,180, which is unsurprising when you consider the rapid house price rises on a wider scale. This has largely fuelled the increase in average FTB deposit, too, which has risen by 13% in the last year to stand at £32,927.

However, this hasn't had a negative impact on affordability, and is actually quite the opposite: affordability has dramatically improved in recent years, with the proportion of disposable earnings devoted to mortgage payments by a first-time buyer standing at 32% in the third quarter of 2015, far lower than the peak of 50% recorded in summer 2007.

Growing importance

The figures also revealed that first-time buyers are becoming an increasingly important part of the housing market, with FTBs accounting for 46% of all house purchases made with a mortgage in 2015. This proportion is unchanged from 2014, but the share has grown considerably in recent years, with it standing at 36% at the start of the housing downturn in 2007.

"For the second year in succession, the number of buyers getting on the first rung of the housing ladder has reached 310,000," said Craig McKinlay, mortgages director at Halifax. "Although the average price of the typical first-time buyer home has grown by 10% in the past year, the number of buyers taking that first step onto the housing ladder has been supported by favourable economic conditions; namely, record low mortgage rates, rising employment and real pay growth."

What next?

Take advantage of the positive market by checking out the top FTB mortgages

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