First Time Buyer Numbers Increasing Despite House Price Rises

In 2016, first-time buyers borrowed more money than ever before with a record £53.6bn of mortgage loans being granted to new property owners, a rise of 13.5% compared with 2015.

In July 2016, the UK’s largest mortgage lender, Halifax, revealed that the number of people buying properties for the first time was increasing, with 154,200 first time buyers being successful in the first half of 2016 compared to 140,500 in the same period in 2015. This represents an increase of 10%.  

December 2016’s borrowing level of £4.8bn was also a record month for first-time buyers, helping to propel the property market to new heights in 2016. This surge occurred despite average house prices also rising. House prices in the UK briefly dipped from July to October but the figures show that numbers picked up towards the end of the year and the average property in the UK now cost’s £220,000, up £3,000 compared to the previous month and up £15,000 year on year. In comparison, the average price of a property in Scotland, in December 2016, was £141,553. This is an increase of 3.5% on the previous year.

In spite of these figures being a cause for optimism for property sellers, the most recent figures released by Halifax and Nationwide for January 2017 both indicate some slowing in the market at the start of the new year. However, the full-year Office for National Statistics (ONS)numbers indicate resilience in a market that suffered from uncertainty as a result of property purchase tax changes and the EU referendum last year. In spite of these challenges for the market overall, it seems that first time buyers have been unaffected, forging ahead in record numbers with house purchases.

This surge in first-time buyer activity is being supported by major banks such as Barclays who are catering specifically for this market. Barclays recently launched a new mortgage to help home buyers pay some of their stamp duty. This cash back mortgage is designed to help first time buyers or home movers to recover some of the costs associated with a home purchase and that might be a barrier to them buying, for example, Stamp Duty/LBTT.

Another lender, Principality Building Society, is offering first-time buyers who have a 15 % deposit a further £1,000 cashback, with a mortgage rate of 2.45% for five years, with no product fee and a free valuation. HSBC is also currently offering a no-fee mortgage fixed for five years at 2.34% for first-time buyers with a 20% deposit and the package covers legal fees and a valuation.

If you are looking for advice about buying a home, please do get in touch with us by calling 0345 646 0208 (Option 4) and one of our experts will talk you through the process to help you to get the best deal. For more helpful tips for first-time buyers please read our seven top tips for saving for your first property deposit


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