First-time Buyers

First-time buyer completions up 7% annually

Christina Hoghton
Written By:
Christina Hoghton

A seasonal monthly dip between January and February doesn’t mask the healthy growth in first-time buyer numbers over the last 12 months

First-time buyer numbers rose by 7% between February 2015 and last month, according to Your Move and Reeds Rains.

The estate agents recorded this rise despite a seasonal dip of 1.4% between January and February, which saw first-time buyer completions fall by 300 to hit 21,100.

The firms noted that low mortgage rates and more generous lending to those with smaller deposits has fuelled the annual rise in first-time buyer transactions.

Adrian Gill, director of estate agents Your Move and Reeds Rains, said: “February is a traditionally quiet period for the first-time buyer market. The month sits awkwardly between the New Year property market rush and the spring-summer activity high. However, beyond that seasonality, these figures demonstrate the strong, steady underlying growth that comes with growing first-time buyer confidence.

“This optimism may begin to reveal itself more clearly in March, when an Easter uplift may sweep away any residual doubts among some first-timers.”

Stable costs

Overall homeownership costs are under control, according to the estate agents, with lower borrowing costs balancing higher prices and deposits.

Average mortgage rates for first-time buyers are down 0.56 percentage points over the last 12 months, to the lowest level for first-time buyers in over five years.

The average loan-to-value ratio remains high, at 82.5% in February, while the average deposit put down by a first-time buyer stood at £29,451 – an increase of 14.7%, or £3,766, on an annual basis. This represents almost three-quarters (74.9%) of a typical first-time buyer’s income.

Gill added: “Although many first-time buyers will baulk at the rising deposit costs, there is a silver cloud to this grey lining. Larger deposits tend to indicate growing incomes and larger mortgages, meaning an impressive number of first-time buyers are accessing the capital to purchase a first home, even in a sellers’ market.”