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Rising first-time buyers defy market slowdown

Rising first-time buyers defy market slowdown

Category: Mortgages

Updated: 24/10/2014
First Published: 24/10/2014

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 It is now over 6 months old so the content may be out of date.

The number of first-time buyers finally getting their foot on the property ladder increased year-on-year in September, defying trends of a slowdown in the market.

According to the latest data from Your Move, some 25,800 first-time buyers completed on their house purchase last month, 11% more than a year ago.

Given the trend towards rising house prices, it is unsurprising that new buyers are paying more for their first home. Indeed, the average first-time buyer purchase price has increased by 3% over the last year to £150,950, and September marks the fourth month in a row in which average purchase prices have topped £150,000.

However, despite climbing prices, the average deposit required by first-time buyers fell 8% year-on-year from £28,498 twelve months ago to £26,134 last month.

According to David Newnes, director of Your Move, it is the Government's Help to Buy initiative that has made higher loan-to-value (LTV) lending more accessible for borrowers.

"Help to Buy has helped keep the blood pumping in the first-time buyer market over the last year, allowing borrowers struggling to save for a deposit the financial life support they need to purchase property," he added.

"At the same time, new mortgage regulations have performed a health check on their finances, ensuring they will be able to withstand a future base rate rise. Lenders have increased the range of higher LTV options available to borrowers, allowing the average first-time buyer deposit to fall even as purchase prices increase."

Overcome the barrier

If you're a first-time buyer struggling to secure that all-important mortgage, there are things you can do to overcome the barrier.

Saving for the deposit should be your first port of call – it may seem like an impossible task, but getting into the saving habit is the best way to go.

Once that's sorted, it all comes down to finding the right mortgage. Government schemes, such as Help to Buy, mean it's now possible to secure a mortgage with a deposit of just 5% – check out our pick of Help to Buy mortgages as a starting point – but if you can put down even more, you'll secure a lower rate.

You'll also need to do plenty of preparation to increase your chances of securing a mortgage. Go through your budget carefully, noting any areas you could cut back on to make sure you can prove affordability to your lender.

Once this is done, hopefully you'll be one step closer to securing that mortgage and putting your first foot on the housing ladder.

What next?

Compare first-time buyer mortgage deals

Find the best mortgages included in the Help to Buy scheme

Compare savings accounts to build your deposit

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.