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More first-time buyers on the ladder

More first-time buyers on the ladder

Category: Mortgages

Updated: 25/07/2014
First Published: 25/07/2014

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 It is now over 6 months old so the content may be out of date.

There's been a lot of good news for first-time buyers over the last few months. Not only have both phases of Help to Buy encouraged more new buyers to get on the ladder, but the subsequent rise in the number of high loan-to-value mortgages has given those with a small deposit even more choice. And it looks like it's paying off.

Research from LSL Property Services has revealed that, in the first six months of the year, 146,000 first-time buyers (FTBs) entered the market – a full 30,000 more than the same period a year ago, marking a 27% year-on-year rise. It's also the strongest first half of the year since 2007, before the financial crisis took hold, when 181,500 FTB transactions took place.

The figures are equally as impressive on a monthly basis. In June there were a total of 26,500 FTB sales, up 10% on June 2013, marking the second consecutive month that the figure has topped 26,000. Meanwhile, purchase prices have remained largely stable for FTBs and have posted a fall of just 1.4% (to £144,273) over the year, while the typical FTB mortgage rose by 2.9% to £119,743. Deposits, on the other hand, have fallen, down 17.8% year-on-year to stand at £24,530.

David Brown, commercial director of LSL Property Services, said: "The bottom of the market continues to recover, even as activity further up the price bands is beginning to show signs of slowing down. Lenders have been more willing to lend to higher loan-to-value borrowers. Help to Buy has boosted confidence and with it demand among first-timers who have been carefully saving up for their deposit."

All in all, it's good news for FTBs. Stable purchase prices combined with smaller deposit requirements, not to mention the increasing number of 95% LTV mortgages available, have meant more first-timers are able to get on the ladder and realise their dream of homeownership.

More are expecting to be able to buy too. Additional figures from LSL's First Time Buyer Opinion Barometer show that 93% of tenants surveyed wanted to become homeowners and 17% expected to buy in the next year, up from 12% in June 2013, and a further 38% think they'll do so within five years. The bank of Mum and Dad is still key, with 39% of FTBs receiving family help to build a deposit in June this year, up slightly from 36% a year ago.

No matter how you're able to fund your dream, it could be a great time to follow suit and get on the ladder. House prices are still rising and mortgage rates have started to climb too – potentially resulting in a higher mortgage amount as well as higher repayments – so why not compare FTB mortgages to take advantage of the current landscape?

What Next?

Compare First Time Buyer mortgages in our best buy charts

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.