14 Jan 2020

Number of first-time home owners estimated to top 350,000 for 2nd year running

Number of first-time home owners estimated to top 350,000 for 2nd year running

The number of first-time property owners in the UK is expected to have topped 350,000 for the second year running.

Yorkshire Building Society estimates that the total hit 353,436 in 2019 - marginally up from the 353,130 recorded the year before.

The society says the figures are gradually approaching those achieved before the worldwide financial crisis of 2008.

London is the most expensive location for first-time buyers, with an average price of £415,618 - followed by south-east England on £264,097.

Encouraging outlook

Yorkshire strategic economist Nitesh Patel said: “Even though the number of first-buyers has stayed pretty much the same as in 2018, it is still encouraging to see first-time buyers top 350,000 for the second year in a row.

“They also represent over half of all homes bought with a mortgage - meaning the first-time buyer mortgage market share is at its highest since 1995, when they bought 53% of all mortgage-financed homes.

“First-time buyer numbers may now be plateauing as property prices have grown at a faster rate than salaries over the past 12 years. This means larger deposits are needed to get on to the property ladder, leading to challenges and barriers to home ownership, which are most pronounced in London and the south-east.”

More accessible

Mr Patel commented that, in recent years, first-time buyers have been helped by strong competition driving mortgage rates down to near-record lows, making borrowing more accessible.

He added: “More mortgage lenders are offering 95% loan-to-value mortgages, which reduces the need for a higher deposit. Home loans with terms of up to 40 years are becoming increasingly popular as first-time buyers look to lower their monthly mortgage repayment.

“Also Government schemes will have made an impact.

“This combination of factors has made buying a home more accessible in recent years.

“This has seen the first-time buyer market bounce back from the financial crisis and perform better than other sectors, such as the home-moving and buy-to-let markets.

“However as these figures show the market may have now reached its peak and buying your first home still remains tough for many.”

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