First-time-buyers hit seven year high in July
- First-time buyer sales climb to 30,000 in July – highest since August 2007
- Average deposit falls 10% in a year to £26,642 – equivalent to drop of £3,000
- But average mortgage rates creeping upwards, reaching 4.19% in July
- Mortgage repayments growing as proportion of income as a result
The number of first-time buyer sales rose to a seven year high in July, according to the latest First Time Buyer Tracker from Reeds Rains, part of LSL Property Services.
There were 30,000 first-time buyer sales in July, a quarter more than 24,100 a year before. It was the highest number of monthly first-time buyers since August 2007.
Data from estate agency chain Reeds Rains also reveals the average first-time buyer deposit fell 10% year-on-year from £29,609 twelve months ago to £26,642 in June 2014 – a drop of almost £3,000 in a year.
The average deposit fell as a proportion of average first-time buyer income as a result. Twelve months ago, the average deposit represented 82.6% of a first-time buyer’s income. In July 2014, that had fallen to 72%. The average first-time buyer income stood at £37,000 in July compared to £35,843 a year ago.
Over the same period, the average first-time buyer LTV has risen from 79.5% to 82.9%, helped by the increase in higher LTV lending facilitated by Help to Buy.
David Newnes, director of estate agent Reeds Rains, part of LSL Property Services group, said: “The first-time buyer market is still active, even as the wider property market is starting to show signs of cooling down. As the economic recovery gathers momentum, more buyers are finding themselves in a position where they can afford to own their own home.
“A whole generation of young buyers were trapped on the side-lines of the property market as the economy recovered from the recession, struggling to save for a deposit whilst inflation remained stubbornly high, savings rates were stuck at a historic low, and real wages fell. But the recent increase in high LTV lending options – enabled by Help to Buy – has allowed them a shot at getting on the ladder at long last, and the number of first-time buyers has climbed to a seven year high.
“Any stalling of the mortgage market caused by the introduction of MMR has mostly worked its way through the system. Lending is operating on full steam ahead once again, although the end to end process has tightened and elongated.”
Read the full First Time Buyer Tracker here